N.C. outsourcing deal leads to IT layoffs

Indian based offshore firm HCL wins outsourcing contract from Dex One; 30% of IT staff will be cut, reports say

A North Carolina company plans to lay off some IT workers after signing an outsourcing deal with an Indian services firm.

Cary, N.C.-based Dex One -- a maker of yellow pages print directories, an operator of an ad network, and a provider of search tools and other products -- said Thursday that it has hired HCL Technologies "to accelerate delivery of new digital offerings while reducing operational costs."

A local newspaper, The News & Observer, reported that Dex One plans to eliminate about 30% of its IT staff. About one in five of the laid-off employees will be rehired by HCL, the newspaper reported.

The current size of the Dex One IT staff wasn't disclosed.

Dex One officials were unavailable for comment today.

HCL runs a regional facility in Cary that employs 278 workers, a spokeswoman said.

One company making a similar move is Xerox, which is preparing to expand its outsourcing arrangement with HCL to include employees who work in its product engineering group.

Xerox has said that some of the engineering employees may be transferred to HCL, but it hasn't yet announced layoffs and said that it's too early to speculate on the workforce impact.

Xerox and HCL signed a six-year, $100 million outsourcing agreement in 2009. The pact called for HCL to provide data center services and run nine Xerox data centers in the U.S. and Europe.

Dex One was previously known as R.H. Donnelley. The firm filed for bankruptcy under the former name in 2009 and emerged this year as the Dex One.

Dex One's CTO, Atish Banerjea, was not available for comment.

He was appointed to that job in January and has since moved the company to the agile development methodology.

In a statement, Banerjea said HCL will give Dex One engineering expertise "that complements our Santa Monica, Calif., and Denver digital product development teams." The outsourcer will also help reduce cycle times to accelerate delivery of new products, he added.

"Beyond the operational benefits, this partnership reduces our costs and is part of the company's larger effort to record $140 million in cost savings in 2011," Banerjea said.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

Copyright © 2011 IDG Communications, Inc.

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