Hertz cuts IT jobs as it shifts to IBM

Some workers will get IBM offers, but not all

layoffs laid off downsize job cuts
Credit: Thinkstock

Hertz has warned around 230 IT workers that their jobs may be at risk as it expands its outsourcing work with IBM.

The employees work at a Hertz technology center in Oklahoma City, Okla. The facility has the company's highest concentration of IT workers in the U.S. They were told this week.

The outsourcing "will probably impact" other U.S. IT positions, said Bill Masterson, a Hertz spokesman.

Asked if the total number of affected IT jobs will be larger, Masterson said: "We expect it to be larger than 230 for the U.S."

Hertz is trying to improve its IT operations. It hired a new CIO last year with experience in the car rental industry, Tyler Best.

The firm seeks a "transformative IT agenda," said Hertz CEO John Tague, in a conference call with analysts last year, according to a transcript at Seeking Alpha.

Tom Kennedy, Hertz CFO, told analysts in an earning call last year that "we have 1,500 people in the back office, which is quite double what it should be. Our call centers are probably double what they should be," according to the Seeking Alpha transcript. He said the firm's IT spend is over $400 million a year.

IBM has a 20-year relationship with Hertz, said Masterson. Some of the Hertz IT employees will get IBM job offers, but it will be a "smaller number" than 230.

Hertz wants the transition to IBM completed by June.

Masterson said he did not know if any of the IT work was being moved offshore.

IBM India Private Limited, an IBM subsidiary, has filed paperwork for numerous H-1B workers for a property in Oklahoma City. The property, according to government records, belongs to Hertz Technologies Inc., a Hertz subsidiary. At least two dozen Labor Condition Applications for this address were found in a random check at MyVisaJobs.

The Hertz cuts come at what may be a worrisome time. The job market for IT workers, overall, may be slowing down. According to an analysis by Foote Partners, the U.S. added 5,500 only IT jobs in January. Only 6,100 jobs were added in December, which was the worst month for IT employment since August 2014.

The monthly average of new IT jobs in 2015 was at 12,300 a month, according to Foote.

This story, "Hertz cuts IT jobs as it shifts to IBM " was originally published by Computerworld.

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