Source: www.stuff.co.nz

Fonterra has made 50 information technology workers redundant following its decision to outsource the maintenance and development of software applications to Indian technology giant HCL.

Procurement director Greg James says 35 of the redundancies were as a direct result of the outsourcing, while the others were “tied into a change in Fonterra’s information systems organisation which will reflect its greater focus on strategy and governance”.

About 100 jobs are believed to have been disestablished as a result of the outsourcing deal.

Forty staff employed within Fonterra’s 130-strong applications development and maintenance department have agreed to take jobs at HCL’s New Zealand subsidiary and some others have transferred to other parts of Fonterra.

The dairy giant first announced it was considering contracting HCL to look after its software applications in March, but discussions with staff have been taking place for more than a year.

Mr James expected HCL to carry out the work in New Zealand and Australia, rather than in India.

Fonterra transferred responsibility for software development from Wellington to Auckland in 2003, but most staff employed in the capital chose to quit the company rather than relocate.

It is not known how many of the staff who chose to relocate were among those who have now been made redundant.

HCL employed 80 staff in New Zealand before winning the Fonterra contract. These were people brought in from HCL’s development centres in India, the United States, Britain and Ireland, and some local recruits. Worldwide, HCL employs 45,600 people.

HCL New Zealand grew its revenues 50 per cent in the year to June, turning over $9.7 million, according to accounts filed with the Companies Office. Profits rose from $271,000 to $421,000.

In 2005, HCL posted revenues of $6.4 million and the year before it turned over $3.6 million.