650+ employees in IT will be outsourced and retitled to consulting firm. It will be part of two phases - 9/14 & 9/28.
While I am aware that more layoffs are coming, that number seems too big to be true. Does anybody else know if this is legitimate information or just wild guessing?
A year later and there’s a post today on this site, that as IT temps contracts expire, they’re being replaced by Infosys . So I think we know the Infosys guesses turned out to be right.
While I am not dismissing the possibility of this happening eventually, it doesn't make sense from a financial standpoint.
The goal of 'project Nickel' is primarily about two things: 1) Immediately reducing costs. 2) Structuring the company for a takeover. I believe that the need to immediately reduce costs is paramount. Given that the majority of IT work is already outsourced or performed by contractors, Molina wouldn't see any huge cost savings because they would still have to pay for outsourced labor as well as the costs in transitioning, which would be significant. Plus, I suspect the most talented individuals would not stick around to train someone to take over their job since it would take them about a week to find a new job. Will Molina find some people to cut in IT? Of course, but the entire department being gone by the end of the year seems improbable.
What is the most disheartening about the whole process has been that as far as anyone knows there has been no input asked on which employees to keep and which to let go. It seems like it will be done based entirely upon job description and not on any merit.
Very likely. The head honchos running Project Nickel have a track history of outsourcing entire teams wherever they go (Pacificare, Conventry, Apria, etc)
Doubt it
The business consistently makes massive mistakes in offshoring this work. The quality is extremely poor and barely works. It also takes about three offshore resources to do the work of one full time employee and offshore resources have little interest in the long term maintainability of what they are doing. For most of them this is just a contract job that they won't have to think about ever again after six months to a year. Molina already spends way too much money on offshoring work because it looks cheaper on paper until the walls start to crumble because the contractors were not passionate about building the best solutions, only the fastest most backwards solutions possible. They are incentivized to write code that breaks or is not maintainable.
No need to beat around the bush. Infosys will have a major presence in IT. It's the business model for a lot of Fortune 500 companies to outsource its IT development offshore. It will show to the investors that they have "the most efficient way" of running an organization on top of that cutting headcounts will lower the cost of capital expenditures. It's sad but true.
The outsourcing rumor is out there I believe due to some proposals coming from Cog and Infy. Other proposals have been made from the same players in the past, outsourcing QNXT for example which would have taken a big chunk away from IT. I think about the sensitivity of State and Federal agencies towards public funds spent on services provided by offshore (or multi-national but originally founded off shore) companies despite the fact that the current full-time employees will theoretically remain with the same mix of "consultants". Perhaps this can be overcome as were previous objections to using "consultants". I do not believe outsourcing will facilitate the changes the business desires but there are questions of trust and perception of past performance which could drive a decision. If the relationship was good in the past I don't see outsourcing unless there are other factors we aren't privy to. If the board of directors is looking to sell Molina outsourcing provides a nice preparation especially if the acquiring company has a significant relationship with the same outsourcing or consulting company. Take a look at United, Anthem, Aetna, etc. In any case, these are my own speculations not informed by any inside information. Something to think about ...
May be it is going to be "huge" notification this week, never know., they have to let go 1400 employees from somewhere, may be whole IT is a good choice.
Last time I counted there are less than 650 IT positions overall which are employees. There are certainly more contractors, so to me, the number itself doesn't pass the smell test. Just my thought.
The fact that the top two IT positions have been eliminated gives a level of credibility to this that I would not otherwise give it.
Doesn't sound right.
Any information posted on this web site is anybody's guess. So it doesn't make sense to ask for validation. Some of them turned out to be true, some didn't. It's up to you on how you want to react to it : ) It's "anonymous".