Offshoring a major threat to European corporate IT jobs

Offshoring is helping to slash 770,000 IT jobs at large companies across Europe in a 15-year period, with the number expected to be even higher if the global economy does not improve.

Consulting firm The Hackett Group has studied IT job losses at large organisations since 2002 and has made total IT job loss predictions up to 2017, based on the effects of offshoring, technology-driven productivity improvements and the low-growth business environment.

While the number of jobs being lost will decline over the next few years, says Hackett, it estimates that by 2017, almost half of all the corporate IT jobs at the companies it started studying in Europe in 2002, will have disappeared – a total loss of 770,000 jobs.

This figure equates to 48% of the 1.6 million jobs in corporate IT that existed in 2002. However, even this number could be worse, says Hackett. It said, "This assessment could be optimistic, as it factors in modest job creation due to economic growth.

"As the IMF and others are now looking at shrinking short-term global growth projections, and more than half of the European Union countries returned to recession in early 2013, even the modest job creation assumptions in the Hackett model may prove to be overly hopeful."

While continued globalisation has eaten into the total European IT jobs sector, Hackett says globalisation needs are driving what job opportunities actually now exist in Europe.

Hackett said the need for transactional staff is "decreasing dramatically", while the demand for "knowledge-centric" staff is increasing – those with the skills to help enable global business operations.

"The evolving offshore job market and the maturing of global business services operations," said Rashpal Hullait, managing director, Hackett Group, "has simply eliminated many of the jobs that used to exist in IT, and a similar thing is happening in finance and other business services areas."

Hackett’s research estimates nearly 83,000 IT jobs will disappear in Europe in 2013 alone, "in the tail end of a spike in job losses which began with the recession in 2008".

IDG News Service

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