blog Over at the blog of Queensland-based ICT analyst house Longhaus, the firm’s managing director Peter Carr has published some ruminations about the tough future facing many of the state’s ICT contractors as the new LNP State Government puts technology squarely in the layoff firing line. Carr writes:
“Over the coming days, weeks and months there are a number of ICT contractors that will not have their contracts renewed in Queensland departments as the new government spearheads a path towards outcome-based consulting. The numbers of contractor layoffs could stretch into the tousands with the majority of those likely to come from Health, and Transport where each of these have accumulated over 600 of this style of contingent resources between them.”
According to Carr, the layoffs could create what he describes as a lot of uncertainty in the state’s technology sector about the short to medium term future of contracting and consulting in the state in general — issues that could be exacerbated by the delay of the State Budget to September. The net effect could be that some really big changes could be on the way:
” … it is likely that times will be increasingly difficult up to 2013 for those that have been largely dependent on state government funding. It won’t just be the small players this time. It may even be possible that one of the big four will retreat operations back to Sydney for the foreseeable future (years). Quite astonishing.”
I’m not quite sure who Carr is referring to when he says “the big four”, but I’m betting if we’re talking IT services then it would be IBM and HP (EDS) at least, as well as likely Fujitsu and CSC. Data#3 also has a very strong presence in Queensland, and also Dimension Data is pretty big these days, but they’re probably not in the top four in this area.
Update: Carr has since clarified that he was referring to Deloitte, Accenture, KPMG and PWC in his article.
We’ve seen similar issues in the past in the Federal Government following the Gershon review, when Delimiter received a flood of complaints from ICT contractors forced out as part of the review’s in-sourcing recommendations, and there’s also a similar contractor massacre currently under way in Victoria — particularly associated with IT shared services group CenITex, which is, to put it bluntly, not doing that well at the moment.
Personally, I don’t think the issue is that big a deal. If you have the ICT skills to be a contractor to government, you’re likely to be able to find a pretty decently replacement gig at need; certainly all of the big IT services companies in Australia are always on the lookout for experience and talent, and there’s also a lot of decent positions always opening up inside end user IT departments (especially in the financial services sector, for example). Plus, contracting is a business, and as someone who runs a small business myself, there are always obvious risks (and rewards) accruing from such an endeavour.
However, I’m also not looking at my final fortnightly payment cheque, as many ICT contractors will shortly be in Queensland. And it’s not hard to understand that some of these contractors will feel a little hard done by with the massive instability unleashed following Queensland’s last election. Anyone in a similar position would feel the same.