IT contractors squeezed into permanent jobs

The number of contractors who have left self-employment to become permanent employees has doubled since June 2000 and the number out of work has more than tripled, according to a survey conducted by contract workers' Web site Shout99.com.

In a readers' poll on the site in June, contractors were asked how business has changed for their limited companies since a similar poll two years ago. According to the results, the number of contractors to have closed their businesses to go permanent has risen from 8 percent in 2000 to 16 percent in 2002, with a large rise in the number of contractors out of work: 39 percent this year compared to 11 percent in 2000.

The number of contractors to have closed their businesses and retired has also risen, from 1 per cent in 2000 to 5 percent in 2002, and the number choosing to work less hours and take more holiday has more than halved, from 23 percent two years ago to 9 percent today.

IT contractors continue to be squeezed by employers as their rates are cut. Recent companies to have substantially cut contractors' rates or made layoffs include Barclays Bank, GlaxoSmithKline, Credit Suisse First Boston, BT, IBM, Deutsche Bank, JP Morgan, Ericsson, CitiGroup and Hewlett-Packard.