Outsource deal leads to job cuts
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Life funds manager Resolution plc warns of job cuts following a major outsourcing agreement with Capita.
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In a new wave of global outsourcing, personal chores are moving offshore, and this is leading to some daunting challenges, both economic and cultural.
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Indian outsourcing companies have to move beyond low-cost services on an hourly-rate basis to offering complete services, according to an outsourcing consultancy.
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IBM's loss of its huge JPMorgan contract comes as outsourcing deals are getting smaller.
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Patni Computer Systems Ltd., an Indian outsourcing firm with its US headquarters in Cambridge, has agreed to pay more than $2.4 million after federal investigators found it underpaid hundreds of employees hired under a controversial visa program for highly skilled foreign workers.
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(InfoWorld) - IBM reported on Mar. 2 that it has signed American Airlines as its latest major human resources outsourcing customer, announcing a $217 million deal to take over much of the airline's personnel operations. TheÂ technology services giant reported that it will support HR functions including training, recruitment, and staffing -- along with related IT and call center support -- for all of American's 88,000 employees in the United States and Canada. Big Blue won the deal in tandem withÂ consultants Mercer HR Services, which will cover health and benefits and pension and payroll management aspects of the seven-and-a-half year contract. The deal with American represents only the latest in a string of major outsourcing agreements won by IBM, including anÂ IT services pact with rival Delta AirlinesÂ signed in Aug. 2006. Terms of the Delta agreement weren't made public, but IBM reported that it would partner with the airline's internal technology group to help oversee IT mainframe services and other infrastructure management operations. In July 2006, IBM announced another sizable HR services outsourcing deal, signing retailer CVS Pharmacy to a 10-year agreement covering many of the same business processes involved in the American Airlines contract. CVS cited the need to help patch together the 55,000 new employees it added over a two-year span of acquisitions as the primary motivation behind its outsourcing strategy. American, a subsidiary of AMR, said it is hoping the outsourcing pact can help it drive down costs and improve services for employees as well as find new ways to offer access to HR tools to workers. Representatives with AMR said that the company expects to save a total of $60 million over the course of the outsourcing arrangement with hopes to cut an additional $2 million per year in related administrative expenses. American will transfer the work currently being handled by roughly 200 of its employees via the agreement, said AMR spokeswoman Susan Gordon. A small number of those workers will be transferred over to IBM and the remaining people moved into other HR roles at the airline. A major element of the decision making process -- carried out by American over the last year-and-a-half -- was the consideration of IBM's ability to further modernize and streamline American's HR-related IT operations, she said. "The ability to work with IBM and take advantage of the technologies and processes they have in place was a key factor in this decision," said Gordon. "American will retain responsibility for strategy through the partnership with the transition of functions taking place over a period of two years." Researchers at Gartner estimated that the market for HR-related business process outsourcing reached $24.6 billion in 2006, a roughly 5 percent gain over 2005. However, the research firm has also predicted that some services providers might struggle with profitability during 2007, impeding growth of the U.S. sector of the market specifically. HR remains the largest segment of the worldwide business outsourcing market at 18.7 percent, Gartner reported, with payroll and benefits administration ranking as the most popular tasks that are being farmed out to service providers. According to a report published by researchers at Boston-based Ovum Summit in Aug. 2006, IBM topped rivals, including CA, Hewlett-Packard, and BMC Software, in several categories of a recent customer poll, winning praise as the industry's "most strategic IT management software vendor."
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Global competition can be a drag. It all but guarantees a steady stream of restructuring, outsourcing, and the nagging insecurity that comes from knowing someone out there may be trying to take your job.
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The termination of the $5 billion deal stands in opposition to a trend toward more IT outsourcing.
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The work may have been subcontracted to another firm.
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NEW YORK - IBM Corp. lost one of its highest-profile outsourced-IT clients on Wednesday, as JPMorgan Chase & Co. said it is canceling the remaining portion of a contract that was intended as a seven-year, $5 billion deal.
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Economic uncertainty prompts companies to delay contracts, but may soon benefit outsource services.
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In a move that will eliminate 300 positions, Washington Gas Light said yesterday it had hired an outsourcing firm to handle information technology, customer service and other back-office duties.
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THE SINGAPORE Government has decided to reverse the world-wide outsourcing trend and ship some work to HP. Singapore&#39;s ministry of manpower has transferred IT staff to Hewlett Packard under an outsourcing contract.
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While media and political attention is on the threat of outsourcing, the reality is that outsourcing is a sideshow in a much larger event.
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Some 50 staffers or more are being let go, and senior aides will be subject to pay cuts, campaign officials said.
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Singapore Airlines (SIA) said it will lay off 130 staff from its information technology (IT) division in the second round of outsourcing reforms announced by the national carrier in less than a week.
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Visiting Indian delegation gets earful from U.S. workers dislocated by outsourcing.