by CIO Staff

Circuit City to Outsource IT Infrastructure

Mar 28, 20071 min
Data CenterIT LeadershipOutsourcing

Will affect some 130 IT employees

As part of an attempt to control costs inside its retail operations, Circuit City today announced that it will outsource its IT infrastructure operations to IBM. According to the company’s press release, Circuit City expects a 16 percent reduction in infrastructure costs over the life of the contract. The switch will reportedly affect 130 IT employees, with the release noting that 50 of them will move into jobs with IBM. The fate of the rest was not disclosed.

The outsourcing move was but one of a pair of cost-reduction moves, the other being the firing of 3,400 employees who were making “well above the market-based salary range for their role,” according to the official announcement.

“We are taking a number of aggressive actions to improve our cost and expense structure, which will better position us for improved and sustainable returns in today’s marketplace,” said Philip J. Schoonover, chairman, president and chief executive officer of Circuit City Stores.