Computer Sciences cuts 200 UTC jobs

Computer Sciences (CSC) has confirmed that it has laid off about 200 of the 1,600 employees who had been working for United...

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.

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