Contractors have been hit hardest by the job cuts but with firms looking to reduce costs across the business permanent IT staff have also been hurt by the downturn.
Even though most firms in the sector have put major new IT projects on hold, 2002 saw potentially far-reaching developments in a handful of key areas.
While the corporate vogue for outsourcing IT and business processes continued, the limitations of so-called "mega deals" emerged.
The Bank of Scotland, which last year merged with Halifax bank to form HBos, axed a 10-year, £700m outsourcing contract with IBM after less than two years and bring its IT back in-house.
Only two months previously HBos announced that it would terminate another IT outsourcing contract, a joint venture with Xansa.
Industry observers said the early demise of both deals - caused by a post-merger drive to cut costs - highlighted the inflexibility in many outsourcing contracts.
There was a burst of activity in online and mobile payments as suppliers, telecoms giants and high street banks jostled for a slice of the emerging market.
Cash machine operator Link revealed plans to allow mobile phone users to top-up their pre-pay accounts at automatic teller machines and signed its first contract for the service with mobile operator Vodafone.
In the financial markets, firms have been grappling with straight-through processing (STP) technology, which automates the trade and clearing process for financial transactions - one of the biggest challenges facing the industry.
However, progress has been limited. Last month an influential industry body, which aimed to create a global standard for STP technology announced that it would suspend its operations.