Large and small businesses in IT alike are downsizing due to the effects of the current economic climate, though are struggling to make jobs in their place, it has been discovered.

The latest survey by the Organisation for Economic Cooperation and Development (OECD) revealed that jobs in the sector during the second quarter fell by two per cent on last year's levels, though a three per cent drop is expected for the next period, V2 reported.

Head of the OECD's Information Economy Group Graham Vickery said that while companies continue to grow after the downturn, jobs will continue to fall away.

He added: "Employment has been much slower to react to the increase than production and is on a slow downward slope. Firms are tightening their budgets and not replacing anybody who leaves."

Established in 1961, the OECD was formed by a number of countries, with early entries into the 30-nation organisation including the UK, Canada, Denmark, the US and Iceland.

According to a recent survey by Connect, the two biggest IT headaches for businesses were 'everyday hassles with IT' (37 per cent) and 'security concerns' (32 per cent).