August 2006 IT Organization Survey, confirms the CIO's except IT organisations to continue growing:

Excerpts:
IT organizations grew 3.8% on average during the past 12 months, and 45% of respondents expect their companies to add full-time staff in the next year. The need for IT labor is leading companies to hire more outsourcers and contractors, but not necessarily at the expense of their in-house staff. In fact, only 27% of the companies that have cut back their full time IT staff say outsourcing is a reason. The bottom line: there's little indication that IT organizations are withering away, despite the many changes taking place.

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Prashanth Rai