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At Hertz IT, sheriffs, shock and tough choices

Patrick Thibodeau | March 11, 2016
Around 75 of 300 Hertz IT workers will move to IBM.

Prior experience feeds the concern that IBM jobs may be relatively short-term. IBM has been working with Hertz for some 20 years, and employees have seen what happens to rebadged employees in previous outsourcing expansions. Many employees were cut after a year.

All laid-off employees can apply for IBM jobs. For those who get them, the process works like this: First IBM will ask them if they want an offer. If employees say "no" before receiving a final written offer, they can keep their severance. But if an employee accepts the IBM offer and then later rejects it, the severance may be lost.

IBM runs large offshore operations and its Hertz IT employees have been told that they will be involved in "shadowing," a term used to describe training replacements. Shadowing can be done in person, over the Web or as a combination of both.

IBM India Private Limited, a IBM subsidiary, has filed paperwork for H-1B visa workers for Hertz Technology offices.

For Hertz IT employees seeking new jobs outside IBM, problems await.

One potential employer, the oil and gas industry in Oklahoma City, only represents about 5% of overall non-farm employment. But it is tremendously influential because it generates a lot of money that spills over to other sectors, said Russell Evans, an economics professor at Oklahoma City University and executive director of the Steven C. Agee Economic Research & Policy Institute.

The oil and gas industry has been growing as an IT employer. But thanks to falling oil prices, IT employment in the oil and gas industry declined last year, according to research by industry group CompTIA.

"There are a lot of technology jobs, database management, database analytics, data science -- a lot of IT technology jobs that are being lost from our oil and gas companies right now as they engage in big personnel cuts," said Evans.

But manufacturing, which is increasing its reliance on technology, grew in Oklahoma City last year. The city is also home to a major U.S. Air Force base, Tinker, and a large Federal Aviation Administration facility that acts as a central registration agency for planes. These operations have produced a significant private aerospace presence.

Oklahoma City is also the state capitol. About one out of every five non-farm jobs are in the public sector, said Evans.

For at least the first half of the year, Evans sees a far-from-robust job market, particularly in high-end, high-skilled jobs, but with pockets of opportunity. How the local economy fares beyond the first half of the year will depend on national and global economic trends, he said.

With oil prices crashing, the Hertz IT employees are concerned about jobs. "Replacing the salary is not going to happen," a worker said.


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