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The Contractor UK website has reported on what it understands to be the first 'take it or leave it' reduction in pay for the clients of Contractor Accountants for IT this year. The organisation to have imposed this latest cut on technology freelancers - of 15 per cent - is BP. The oil giant told its temporary IT staff that they would lose their contracts if they did not accept the reduction. This compares to a 10 per cent cut in computer contractor pay that has been proposed, but not yet put in force, at a major bank. Some oil and gas contractors have also taken an up to 10 per cent hit to their rates in recent times. However, a director at a London-listed recruiter has described rates for IT contractors working for oil and gas firms as having long been "stable" until this announcement from BP, which attributed the decision to cut rates to falling oil prices and the need to downsize. Although rates were also slashed at the company in March 2009, this was not as big a reduction as now. In fact, IT contractors have experienced few such large unilateral decreases in their pay since the 2008 financial crisis. A BP spokesman explained to Contractor UK: "The oil price has halved since last summer which unsurprisingly has had an impact on our business. [So] we are asking for a 15 per cent reduction and looking at how to reduce our complexity and cost-base given that BP is one-third smaller than it was five years ago." Contracting industry observers responded philosophically to news of the cut. Anthony Sherick, managing director of Technojobs.co.uk - an IT and technical contracts job portal - commented: "This rate cut reflects what is going on in the oil sector, where challenges are denting revenue and contractor volumes." "The change in the oil price, in particular, has seen a number of oil companies adjust their staffing plans, and this 15 per cent rate cut is just another consequence." However, Richard Herring, managing director at Volt, pointed out that with the overall technology contracting market remaining in good health, even many of those freelancers that have accepted BP's reduction may soon be looking for pastures new. "The contractors have [likely] agreed to pay cuts at this stage", he said, "[but] there may be a risk that they ultimately move to a new assignment [outside of BP] that is paying a higher rate."
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