IT workers brace for outsourcing, layoffs at health insurer

HCSC says it is moving to a ‘blended’ IT model

layoffs laid off downsize job cuts
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A major health insurer, Health Care Service Corporation (HCSC), is planning to outsource part of its information technology operation. The employees don’t have all the details about what’s in store for them, but this may be a large IT layoff.

Employees were recently informed that 70% of the positions in the IT group, in infrastructure, will be outsourced, according to two IT workers who requested anonymity. Estimates on the number of employees who would be affected varies, but the move could involve 540 people in IT. The layoffs are planned from February to April.

The jobs that would be moved to an outsourcer include monitoring and incident resolution, helpdesk support, and problem and patch management. Other areas would be partially outsourced, such as infrastructure product development, cloud and automation. HCSC will retain governance and planning. The outsourcing vendor has not been named, the employees said.

Chicago-based HCSC, which employs 22,000, would not confirm whether a layoff is being planned, but acknowledged that it is increasing use of “external business partners.”

In a statement, HCSC spokesman Mark Spencer said, “We are adapting how we work to meet our members’ needs in today’s rapidly changing healthcare marketplace. We are modernizing our information technology systems, developing critical skills and capabilities within our IT workforce, and building strong collaborative partnerships with our business colleagues to rapidly deliver solutions that improve our service to members.

“We are transitioning to a blended operating model in which basic operational tasks are handled by strategic business partners, and critical strategy and design work is performed by HCSC employees," the statement said. "The new model uses more flexible and agile ways of working with new tools, allows us to invest in developing new capabilities and innovation, and reduces complexity related to years of maintaining legacy systems."

Employees anticipate that the IT work will be moved offshore, and that they will be training their replacements. They are concerned that the outsourcing will follow the playbook used at other companies, where employees train H-1B visa holders brought in by contractors, and that the training must be completed as a condition of severance.

“We’ve seen it happen in other companies, and now we’re the ones getting the slap in the face,” said one IT employee. “Good IT people will be out of work, and some of them won’t find replacement jobs. This H-1B abuse hurts Americans, and it hurts America. Shame on HCSC,” this employee said.

Spencer said employees will be able to apply for hundreds of open positions, “and we continue to post new roles in the IT department to bring in key skills and capabilities.”

The company typically has hundreds of open positions, and employees “are able to apply for other opportunities across the company,” Spencer said. In any given month, “we have voluntary attrition of one percent of our workforce, which provides additional opportunities to retain employees,” he said.

The IT employee said that most of the job postings are for managers, not technicians, and that they expect most of the positions retained will be manager roles. The few posted technical jobs will be for “far, far fewer than the number of folks they’re getting rid of, and of course there will be much competition for each position,” this employee said.

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