Tuesday, May 20, 2008

First Data to cut 400 programming jobs

Source : Click

About 400 highly paid Omaha programmers will lose their jobs this year when First Data Corp. outsources some of its software programming work, probably to Argentina and Brazil.

Several employees said the reductions were announced last week. They spoke only on the condition they not be named, because they could lose their severance pay or lose their jobs immediately.

Officials at First Data, which went from a publicly traded company to a private company in a buyout last year, declined to comment on specifics of the layoffs, including the number of people affected.

The employees said they were told that 80 percent of the people in production programming stood to lose their jobs, which the workers said would be about 400. The first may be gone by the end of July; all probably will lose their jobs by the end of 2008.

Each is to work at what was called "knowledge transfer'' -- training others how to do the job -- for about two months as a condition of receiving severance pay, said the employees.

"You train someone to take your job,'' one person said.

Severance pay will be based on salary and years of service, workers said. For example, someone getting $60,000 a year with five years at the company would get six months pay and benefits. Somebody making $120,000 and with five years at the company would get a year's salary and benefits.

Another 50 or 60 people will be shifted from First Data's payroll to that of Accenture, an international consulting company First Data has hired to manage the outsourced work.

First Data is a third-party processor, meaning it does credit card and other electronic payment processing for cardissuers such as banks and retailers.

The production programming unit codes and maintains the software that controls the processing of financial transactions, that updates cardholder records and that prints and mails cardholders' bills, as well as prints and embosses the cards themselves.

First Data confirmed in a statement that it would cut jobs. Employees affected will be considered for other jobs in the company, the statement said.

The company said last year it would outsource some of its information technology work as a way to reduce costs. The announcement came with the purchase of First Data, then a publicly traded company, by Kohlberg Kravis Roberts & Co., a New York investment group.

Other parts of the companywide cost-saving initiative include consolidating 12 U.S. data centers into three. Omaha already has one and would get another in the restructuring.

First Data is taking a number of "technology initiatives,'' the company said, referring to the development of new products and services.

One example: Being able to walk into a Starbucks and touch a code on your cell phone to order and pay for your usual morning order.

First Data has met with stiff competition in recent years from other third-party processing companies and a shift by major card-issuers, such as the country's biggest banks, to do their own processing.

The coders who face losing their jobs to outscourcing said that sort of innovation was laid out in last week's meeting.