CEO's message a jolt to IT workers facing layoffs

IT employees at insurer expect to train replacements as work shifts to India-based IT services contractor

outsourcing global map and workers
Credit: Thinkstock

IT workers in the infrastructure team at Health Care Service Corporation (HCSC) were notified recently of their layoff. They expect to be training replacements from India-based contractor HCL. The layoff affects more than 500 IT workers, according to the insurance firm.

This familiar IT story began a little differently. A few days before employees were notified in mid-October of their layoff, HCSC CEO Paula Steiner talked about future goals in an internal, company-wide video.

Steiner's comments weren't IT-department-specific, but the takeaway quote by one IT employee was this: "As full-time retiring baby boomers move on to their next chapter, the makeup of our organization will consist more of young and non-traditional workers, such as part-time workers or contractors," said Steiner in the video.

What Steiner didn't say in the employee broadcast is that some of the baby boomers moving "on to the next chapter" are being pushed out the door.

"Obviously not all of us are 'retiring' -- a bunch of us are being thrown under the bus," said one older employee, who requested anonymity. Employees contacted say many older workers are affected by the outsourcing decision, although they had no numbers.

Employees have known for several months that HCSC was moving work offshore. But until last month, they didn't know their individual fates.

HCSC is defending the layoffs, scheduled in the first two quarters of next year. HCSC operates Blue Cross and Blue Shield plans in Illinois, Montana, New Mexico, Oklahoma and Texas. It has 22,000 employees.

In a statement, HCSC spokesman Mark Spencer, said, "To meet our members' needs in today's rapidly changing healthcare marketplace, we are adapting how we work. Our members want technology solutions that make navigating the healthcare system easier and that help keep rising costs in check. Our information technology teams are being transformed to work with colleagues across the company, focusing on those and other member needs," he said.

Spencer also said that "our new IT approach uses more flexible and agile ways of working with new tools, allows us to invest in developing new capabilities and innovation, and reduces complexity by leveraging the latest technology solutions. As part of this effort, we have made the difficult decision to eliminate some roles."

"We do not make decisions about our workforce lightly, and we are committed to ensuring employees are supported throughout their transitions," said Spencer. Employees will get severance and "transition" services, he said.

Spencer also provided an expanded portion of Steiner's comments to give it "full context." It follows:

"A few years ago we created our own view of what the year 2020 could look like. One of the things we envisioned was that businesses, including ours, would be designed to reflect the complexity of a changing world around us. We envisioned for example that companies will become flatter -- or have fewer layers -- and they will be more cross-functional and virtual in many instances with improved collaboration. As full-time retiring baby boomers move on to their next chapter, the makeup of our organization will consist more of young and non-traditional workers, such as part-time workers or contractors. Future positions will require skills in analytics, process excellence, and the use of technology in addition to our more traditional dependence on functional or business 'know how.'"

Computerworld heard from four IT employees. They have provided differing estimates of the affected headcount, and some believe the number of affected employees is considerably higher, although the company denies this.

Employees also said there is little optimism that many will find jobs elsewhere in the company.

One said those who are offered jobs by HCL will have little choice but to accept. Rejecting a job with the contractor may mean loss of severance. HCSC did not confirm or deny that aspect of it.

HCL is user of H-1B visa workers, which means some of the laid-off workers may be training foreign replacements. This firm was also recently hired by the University of California, San Francisco.

Employees at the university, a public, taxpayer-supported institution, are trying to fight the university's action and stop their jobs from going overseas.

Federally required notices alerting the university's IT staff to the use of foreign workers were posted. The visa workers will be doing the same jobs IT staff now does. "Many of us can easily fill the job. We are training them to replace us," said a university IT employee getting laid off.

This story, "CEO's message a jolt to IT workers facing layoffs" was originally published by Computerworld.

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