The recession is forcing IT directors to decide between cutting back on costs or making specific investments to deliver more with less, according to research carried out by Enterprise Management Services.

Only 26 per cent of UK companies will see their IT staff spending budgets grow, while 40 per cent will see cuts and the remaining 34 per cent will have budgets completely frozen, says the report published by workload automation firm UC4.

"Already this year, many organisations have shed thousands of IT jobs in a knee-jerk reaction to cut costs, completely overlooking the value of skilled IT staff to the business," says the report.

"This ham-fisted approach stifles innovation, which can be easily achieved through consolidating the workforce and automation. This method cuts costs and allows firms to retain talented staff."