No, I'm not advocating that you avoid laying off IT staff for humanitarian reasons. That goes without saying. You don't need me to point out that laying off a staffer is taking away their livelihood, putting their children at risk of losing medical care, possibly putting a family out of their home and in the street and stressing out a marriage to the point of divorce. In other words, if you have one ounce of compassion in your body; don't do it. Find another way.
The other reason you shouldn't do it; it's a bad business decision given the nature of how IT departments work and how they can save your bacon at a time like this.
Let me count the ways:
1.) Cut IT spending? Heck, yeah! We're in a recession. But, make them smart cuts. Cut out investing in new technologies. Now is not the time for a big rollout. You'll get far more out of fine tuning the more recent rollouts already in place, then starting from scratch with a buggy, time- consuming new application or hardware switchout. Who's going to do that fine tuning? Answer: in-house IT people that are interacting with staff who use the technology. It takes boots on the ground to get that feedback and respond to it.
2.) Renegotiate vendor contracts. You want to save money? Have your IT folks go back to their vendors and strong arm them for better service contracts.
3.) Does it make sense to throw out a $50,000 piece of equipment? How about a $100,000 piece of technology or even pricier? Why would you throw out a salaried employee that costs about the same? You've made an investment in your staff with training, team building, developing work flow, etc. Yes, it's true. You can always find a outside consultant that can replace your .NET developer or Oracle applications developer. But you get what you pay for in the end. That consultant won't know your business the way a staffer does. Are you sure you want to throw someone out the door that you've put so much time and money into over perhaps many years? Your competitors may end up having the last laugh on that one!
Bottomline: Now is a time to trim the fat, for sure. But it's also a time to recognize and protect your most valuable company assets. You can't put a price tag on institutional knowledge. Especially in IT, institutional knowledge is what you desperately need to come up wtih creative solutions to get the most out of what you already have, to stretch older technologies until you can afford to invest in newer ones again and to innovate with those older technologies in ways that will streamline the business to new efficiencies.