November 10, 2008, 12:21 PM — Affiliated Computer Services Inc. plans to boost the capabilities of its offshore outsourcing and IT services operations -- and reduce its costs -- by moving some higher-level technical jobs to other countries.
ACS officials said on an Oct. 30 financial results conference call that they intend to shift 4,200 jobs outside the U.S. during the fiscal year that began in July. That would give the Dallas-based IT services firm more than 20,000 offshore employees, amounting to nearly 35% of its 63,000-person workforce.
And to ensure that the new transfers have "a greater financial impact" than previous offshoring moves did, a larger-than-usual percentage of the affected positions will be "more complex, higher-paying jobs," including ones in application development and project management, ACS President and CEO Lynn Blodgett said.
The expected savings will leave ACS with more money to invest in areas such as sales and development of new service offerings, Blodgett said. That's especially important with the economy in a state of turmoil , he added.
"This is the right thing to do and the right time to do it," Blodgett said. "This investment will make us stronger, not only during this economic storm, but for years to come."
Over the past few years, ACS has been gradually shifting jobs to offshore and near-shore facilities . The company's new plan includes opening more service delivery centers in India and adding workers in the Philippines, Mexico, Jamaica and Guatemala.
Ron Hira , an assistant professor of public policy at the Rochester Institute of Technology and co-author of Outsourcing in America , said that high-level IT jobs "are just as vulnerable" to offshoring as lower-level ones are. Every IT services firm, big or small, is shifting more-advanced technology jobs offshore, he said.
An ACS spokesman said it's too early to know whether the new offshoring moves will lead to layoffs of U.S. workers. The firm's business continues to expand, he pointed out.
But a slide in the conference call presentation indicated that ACS is projecting US$38 million to $42 million in "severance/transition" expenses as a result of the increased offshore activity. According to the slide, as much as $25 million of that total is expected to be spent during the company's current fiscal second quarter.
This version of the story originally appeared in Computerworld's print edition.
