Computer Sciences (CSC) has confirmed that it has laid off about
200 of the 1,600 employees who had been working for United
Technologies (UTC) under a $3.7bn (£2.4bn) outsourcing deal.
The layoffs are the latest, and most tangible, evidence of friction
between the two companies on the 15 year outsourcing contract, due
to run until 2014.
Sources last month said CSC was trying to get more money from UTC
to cover its costs on the agreement and added that workers assigned
to UTC were braced for cutbacks.
In a statement last week, CSC said the layoffs included about 165
workers based at UTC's headquarters Connecticut, USA. The cuts were
made to help control costs and realign resources, according to a
CSC spokeswoman. She declined to comment further on why the
employees were let go.
UTC spokesman Paul Jackson said executives at the $27.9bn
manufacturing conglomerate are "watching the situation very closely
to make sure service levels aren't affected". Jackson also declined
to elaborate on the situation.
The contract between CSC and UTC was originally signed in May 1999
as a 10-year deal that involved only UTC's Pratt & Whitney
aircraft engines subsidiary. The agreement was expanded later that
year to cover all of UTC's IT infrastructure in North America and
was then extended by another five years last November.
As part of the outsourcing contract, CSC is supposed to consolidate
20 major data centres into three facilities and combine UTC's 15
end-user help desks into a single operation. The deal also calls
for CSC to standardise about 45,000 PCs on Dell technology and
eliminate about 350 of the 2,950 servers that UTC had in place when
it was signed.
An unspecified number of the workers being dropped from the UTC
account will be offered other jobs within CSC, according to a
spokesperson for the outsourcing firm.