WiPro outsourcing takes chunk out of Woolworths

news Retail giant Woolworths has confirmed the jobs of some 64 in-house technical staff will be affected as part of a wide-ranging IT infrastructure outsourcing contract inked last year with Indian IT services company WiPro.

In late December the company confirmed in a statement that it had signed a new IT outsourcing arrangement with WiPro, which would supply a range of infrastructure services that were previously services in-house. Woolworths declined to put a value on the contract, but it is slated to have a dramatic effect on the company’s internal IT department.

“There are less than 64 Woolworths staff affected in total,” the company’s statement said. “Some of the existing team will remain at Woolworths, some have an opportunity to go to Wipro and others will be redeployed. Where roles become redundant, all efforts are made to find alternate roles within Woolworths for impacted individuals.”

Delimiter first learned of the outsourcing deal through an anonymous tip, with the unverified tipster stating that the tendering process had taken up six months and WiPro’s eventual win being announced to Woolworth’s internal Business Technology and Services (BTS) department in early December last year — just before the Christmas period.

At that stage the tipster noted that some 20 Woolworths staff would be transitioned to employment with WiPro, with up to 28 more staff being re-assigned, re-deployed within Woolworths or made redundant and a number of other management roles being shifted to an outsourcer management role, rather than a team management role.

The anonymous tipster claimed that the plan was to commence the transition in early 2013, but those staff who were to be made redundant had already had one on one sessions with senior management and had been informed of the fact that they were to be made redundant. However, they were still expected to “continue delivering at the current pace over the peek festive season trading period”, the tipster wrote.

The outsourcing has also been rumoured online for some time. In May 2012, for example, a poster on broadband forum Whirlpool noted that their “spy” in the company had advised them that data administration, Unix systems administration, “MVS” (Delimiter is unsure what this acronym stands for), Microsoft Office infrastructure administration and so on were to be outsourced. Note: The following comments by Whirlpool posters cannot be verified to be accurate.

“I’ve a couple of CVs cross my desk from Woolies IT, so it seems that people are keen to get out,” wrote another commenter, and a third added: “Woolworths are desperately trying to find an outsourcer for all their corperate IT including Windows, Unix & Linux admin & support. Today they announced the 3 remaining tenders were all Indian companies with one of them operating under the mission statement of returning all OZ jobs to India.”

Another commenter added: “Yeah the following companies were interested IBM, HP, Fujitsu, tcs, hcl and wipro. HP pulled out of the race, Fujitsu did not bid even put through a bid, IBM’s bid was deemed to be to expensive, The only remaining tenders were all Indian companies.”

Woolworths’ spokesperson also noted last year that the company had recently engaged retail software company Retalix on some systems integration projects.

It’s not the first time that Woolworths has engaged with Indian IT outsourcing companies with respect to its IT operations. In April 2009, for example, The Economic Times reported from Bangalore that top Indian IT firms TCS, Infosys and WiPro, along with US rivals IBM, Accenture and HP were chasing an IT outsourcing contract reported to be worth some $100 million with Woolworths. At the time, Woolworths was reportedly planning to deploy a SAP-based system to transform its merchandising and supply chain platforms.

opinion/analysis
I’m really not surprised by this move on the part of Woolworths — outsourcing IT infrastructure management is pretty much par for the course for large organisations — but I have to say that the timing of the move comes across a bit poor, as it was announced just before Christmas. It sounds like the affected staff were quite aware up to six months earlier that something like this could be on the table (enough time to find another job), but it would have been nice if Woolworths had waited a month or so until after Christmas before getting staff in for those infamous meetings with management.

After all, we’re talking about a company here which made $1.8 billion in net profit last year off revenues of $55 billion. A little timing sensitivity towards the people who keep your key business systems functional would not have gone astray. Or perhaps a farewell iPad as a farewell ‘Thank You’ present? Apple tablets were handed out en-masse to Woolworths’ store managers last year, after all.