Gartner said that increasing pressure to deliver on business processes, and the momentum behind the outsourcing movement, will cause around two-thirds of companies to lose at least half of their IT workers by 2008.
The report stated: "This does not just mean changes to the CIO's role. It means fundamental shifts in the very make up of the IT organization, its position in the wider enterprise and the future provision of IT services. Gartner predicts that by 2008, at least 60 per cent of IT organizations will reduce their in-house workforce by at least 50 per cent compared to 2000."
The report said that in the coming years, the IT industry is set to experience massive changes in its approach to business. IT directors will become more involved with generic management to cater for the growing number of business processes IT will have to deliver. The report also called on companies to use IT investments to enable more business processes.
Gartner's managing VP John Mahoney said that if IT workers were flexible in the next few years, the forecast could present some interesting challenges.
"It is challenging, not gloomy," said Mahoney. "The future relies on CIOs and IT workers to assess their value. Agility will be one of the most important factors to drive growth here. The world is not going to change in six months, but it is going to change over the next few years. There may be less IT technical roles in developed economies."
Mahoney added that IT was increasingly becoming part of critical business processes, and that IT organizations embracing this fact would benefit from the changes ahead.
In its report, Gartner recommended IT departments to focus on business outcomes rather than IT services because by 2008, at least half of the outsourcing market would be working on this assumption.
"Some of what is outsourced will go to other geographies," Mahoney added. "Those markets need to keep an eye on the other markets around the world. Value is a combination of price and quality. If it's cheap but breaks down every Friday, that's not good value."
Dan Ilett writes for ZDNet UK.