Blue Cross Blue Shield of North Carolina is outsourcing its information technology operations to Fujitsu America in an deal valued at $250 million.
The agreement covers five years.
Fujitsu will assume ownership of BCBSNC’s data center, related hardware and provide IT services to the health care insurance firm.
Of 210 BCBSNC employees who work in IT-related services, 185 will be “offered opportunities” to work with Fujitsu, the companies said.
The affected employees will “transition with current salaries and comparable benefits,” BCBSNC spokesperson Michelle Douglas said.
Employees who are offered positions with Fujitsu and decline “will effectively resign (i.e. no severance),” she added in an e-mail response to questions from WRAL.
The remaining 25 people will be retained by BCBSNC.
Douglas said striking a deal that did not involve layoffs was important to BCBSNC management’s thinking.
“They will transition to Fujitsu with current salaries and comparable benefits. They can maintain their current 401K plans or transition their plans to a Fujitsu option,” she explained. “They will be able to “cash out” any unused BCBSNC [paid time off].
“In a time when many companies are laying off employees, we feel very good about the way our employees will be taken care of as a result of this transition,” Douglas added. “That was a top priority for us.”
According to BCBSNC, the outsourcing will give it “business flexibility and significant operational cost savings.”
Other companies were considered for the contract, Douglas said.
“We chose Fujitsu not only because of their strong track record and competitive bid, but also because of their commitment to retain and be fair to our employees,” she explained.
“For example, they understood that for any agreement to work for us, the arrangement must offer professional opportunities for our people. Their commitment was demonstrated by the fact that they are making offers to all 185 affected employees who will not be retained by BCBSNC.”
The data center is located in Research Triangle Park.
In 2010, BCBSNC experimented with some IT outsourcing in a contract with a Boston-based firm. Under that deal, some IT functions were to be performed by workers in India.
“This change is part of our effort to find ways to reduce costs while maintaining high levels of quality and service,” said BCBSNC Chief Information Officer Alan Hughes in a statement about the contract with Fujitsu.
“Our employees provide these services very well – and at remarkable levels of reliability – but this new agreement will provide greater flexibility and cost-effectiveness. As we considered options for transitioning these functions, Fujitsu America’s strong and comprehensive commitment to our people, business needs and technology set them apart.”
The transition of employees, operations and services is expected to begin in February.
“Fujitsu brings a proven track record of global strength, capabilities, expertise and experience in managing datacenters and complete information systems to the existing BCBSNC infrastructure,” said Fujitsu America President and CEO Tony Doye. “Tapping into the intelligence and resources of the BCBSNC employees and the functionalities of the current datacenter ensures the operational continuity that is critical to providing our customers with flexible, dynamic and manageable solutions within the datacenter.”
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