IT departments have cut their spending on training by an average of 5%, with training in management skills bearing the brunt of the cutbacks, according to research by IT training analyst Pardo Fox.
The cutbacks have raised fears that businesses may be leaving themselves short of the vital strategic skills they will need when the economy recovers.
"Tactical training is still being done when companies are installing new systems, but training that is less essential or less urgent is being cut back," said David Pardo, director at Pardo Fox.
Pardo Fox said IT departments are unlikely to restore their training budgets until at least 2003, and things will get worse rather than better.
Other market watchers paint a similar picture. Tony Lock, senior analyst at Bloor Research, said, "Over the last nine months it is clear that a lot of discretionary spending on training has vanished. If there is a specific skill set that people need for a project, that is still happening, but career development training is being delayed."
Training companies have reported a shift in demand away from e-commerce and management skills towards basic system skills, such as C++, Unix and object-oriented programming.
"When the Web came about people were pouring money into luxury training, rather than necessary skills," said Bill Walker, technical business director at QA Training. "Now we are seeing a steady growth in demand for core skills."
The cutbacks are being felt across all sectors, but are especially acute in telecoms, where spending on IT training is down by as much as 20%.
Richard Chappell, sales director at Learning Tree, said, "We noticed things were slowing down from July. The 11 September attacks exacerbated an already tight situation. Customers do have training requirements but because of the uncertainty there is a reluctance to invest in long-term training."
Experts have warned that a shakeout among smaller IT training companies could place the training programmes of some IT departments in jeopardy.
Training companies that had predicted a growth in demand for training of up to a third this year have been left with expensive premises that are being under-used. Some have cut rates by up to 40% in an attempt to win business.
Last month, training company Amraf, which offered training to 5,000 IT professionals a year, became the first victim of the downturn, leaving thousands of customers out of pocket.
However, some large companies are using the downturn to invest in the skills they will need for the upturn, said Philip Virgo, strategic adviser at the Institute for the Management of Information Systems.
"In a number of cases there have been increases in demand for some of the longer courses - good quality structured programming and project management. Companies that are in business for the long term are using the downturn as an opportunity to train staff for the long-term," he said.