Hundreds of Australian IT contractors will be out of a job come Christmas, after the Department of Home Affairs (DHA) in Canberra told workers they would no longer be needed.
Fairfax Media reported that between 170 and 300 IT contractors will be let go due to budget pressures.
The impacted contractors will be finishing up in the next few weeks.
A spokesperson from the DHA said the cuts were a result of prioritisation.
“The Department of Home Affairs regularly reviews operations across the Department and the Australian Border Force (ABF), to ensure that resources are applied to priority projects and activities aimed at prioritising the delivery of our key objective, to keep Australia prosperous, safe and united,” the spokesperson told Information Age.
“Measures to ensure budget resources are applied to priority outcomes include ensuring that travel and recruitment are within budget parameters as well as reducing duplication and reassessing project effort.
“Some projects have been assessed as lower priority and this will see some projects pause, slow-down or cease.”
The spokesperson confirmed that the cuts do not include Australian Public Service jobs.
In an internal email, staff were told that certain projects would be closed or paused as a result of a “forecast overspend”.
“The reduction of work in our branch has an immediate impact on our contractor workforce, and today directors and I have spoken with contractors identified as affected,” said the email, published by iTnews.
“Ongoing assessment and review of branch deliverables will continue to ensure projects and business operations remain within budgetary allocations.”
However, based on the ‘budgetary allocations’ of recent years, the DHA does not seemed strapped for cash.
As part of a Parliamentary inquiry into government expenditure on contract workers, the DHA revealed it spent $140.1 million on IT contractors in 2016-17.
This was down from $146.6 million in 2015-16.
The DHA was the highest-spending government department when it came to IT contractors.
In its Technology Strategy 2020, the department does suggest it will take a more streamlined approach to major technology projects in the future.
“The Department is facing increasing volumes in trade and travel in a volatile and evolving threat environment,” says Deputy Secretary Intelligence and Capability Group, Maria Fernandez in the document.
“In addition, the Department is seeking to address these challenges in a time where resources are increasingly scarce.
“For these reasons the Department must maximise the effectiveness of its technology investments to deliver those systems and services that have the most significant impact within our resource constraints.”
It is understood that the paused projects include an API gateway capability scheme, a health system project and the visa risk assessment intelligence capability.
What do these cuts mean?
For the thousands of IT contractors in Australia, such cuts are all part of the game.
Director at IT recruitment specialist Robert Half, Andrew Brushfield, told Information Age that, despite the popularity of contracting, when organisations are looking to bring in spending, contractors are often the first to go.
“Companies – across sectors – are increasingly turning to a flexible staffing strategy where they employ a mix of permanent employees and contractors not only to guarantee business continuity, gain access to certain skillsets and manage projects, but also to optimise staffing cost-efficiencies,” he said.
“Due to the nature of the job, it is therefore possible – if companies have to cut staffing budget – that temporary contracts will be ended, to avoid having to terminate permanent employees.”
Brushfield said he did not expect the DHA’s cuts would push down industry salaries, despite hundreds of contractors re-entering the market.
This is largely due to the widespread demand for IT workers in Australia.
“We see continuous demand for IT contractors as employers are looking for skilled staff on a contract basis to have immediate access to certain specialised skillsets and for particular projects that will enable them to stay ahead of the competition, and provide better and faster services to their clients,” he said.