State Street to Outsource IT
The large US money management firm State Street has decided to outsource IT jobs in a bid to cut costs. The company is planning to cut 850 jobs, 558 of which will be in the state of Massachusetts. This is part of the company's shift to cloud computing technology which is projected to save over $600 million per year.
State Street will be laying off over 500 employees and transferring another 320 IT jobs to Wipro and IBM in outsourcing deals it has signed with these vendors. Analysts are positive on the cost savings and refer to the process as "creative destruction" which is necessary to remain competitive and increase profitability for investors. The CEO of State Street also said that the company plans to develop some new IT products in the area of data analytics which will augment their financial services operations.