Qwest will shift 600 jobs to IBM- Telco transfers computer work, but no jobs are cut

Qwest Communications confirmed Tuesday that it will contract some computer operations to IBM.

By Jeff Smith, Rocky Mountain News

The Denver telco said the move will affect 600 employees, including 280 in Colorado. But all employees will have the choice to transfer to IBM and remain at work in the same location, said Qwest spokeswoman Kate Varden.

Qwest wouldn’t disclose the terms of the deal or estimated cost savings. Bloomberg News reported last week that the two companies were in discussions on what could be a multibillion- dollar computer services contract.

"The good news is that no jobs are lost here," Varden said. "All of these employees are being offered a comparable job with IBM. They’ll start coming to work as IBM employees with Qwest now the customer."

Varden said the work being outsourced to IBM involves less than 10 percent of Qwest’s information technology work force overall and is confined to non- sensitive computer operations, backup, recovery and monitoring. IBM won’t be handling any proprietary or customer-specific data, she said.

Varden said the agreement will enable Qwest to focus on what it does best, while leaving the computer operations to an expert like IBM.

Employees were notified of the agreement Tuesday, and will be provided more information today in group meetings, Varden said.

She said the employees will "have some time" to consider whether to take the IBM offer and, in the meantime, will continue in their current jobs.

IBM officials weren’t immediately available for comment Tuesday afternoon.

Tom Friedberg, a telecommunications analyst at Janco Partners in Greenwood Village, said the move is consistent with Qwest Chief Executive Dick Notebaert’s focus on the basics such as the distribution of telecommunications services.

"If someone else can do this (the computer operations) as effectively, I don’t see why this isn’t a win" for the company, Friedberg said.

But Friedberg said he is still looking for Qwest to improve its operational profit margins, and said he didn’t know to what extent this move will contribute to that effort.

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