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110 Losing Jobs At Insurer

IBM To Offer Jobs To 280 Others As The Hartford Outsources

January 24, 2007
By DIANE LEVICK, Courant Staff Writer

About 110 employees of The Hartford Financial Services Group's data center in Hartford will lose their jobs and some 280 others will be offered positions with IBM under a new outsourcing contract.

The insurer said Tuesday that its new five-year contract with IBM, which will handle many data center services, will provide The Hartford with more flexibility and ability to meet its goals for growth.

The information technology arrangement will affect about 390 employees. IBM will start formal interviews right away to select about 280 people it wants from The Hartford, and those who are chosen will become IBM employees April 1, company spokeswoman Shannon Lapierre said.

The people IBM selects will work on The Hartford's account and remain in the insurer's local offices. Under the contract, IBM will support and maintain systems and data center equipment used to run them. The contract covers databases, applications, storage, backup and recovery.

Some of the other roughly 110 employees who aren't picked by IBM may get other positions with The Hartford. Those who don't will be laid off after transitions, mostly ranging from a few months to late October, Lapierre said.

"The Hartford worked very hard to minimize job impact" on employees and the local economy, she said, noting that the company has grown its Connecticut workforce 50 percent in 15 years.

News of the layoffs comes weeks after The Hartford said it will build a new $146 million office building in Windsor for its Hartford Life unit and create about 300 new jobs in that business over five years. The Hartford currently has nearly 13,000 employees in Connecticut.

Although 390 workers are affected by the IBM contract, The Hartford plans to keep about 100 other local data center employees, who will continue to do project and problem management.

Some of the work IBM is taking on will be done offshore, but further information was unavailable.

The Hartford said employees who accept a position with IBM and stay with that firm for a certain amount of time will be paid a retention bonus. No other details were available.

The Hartford is outsourcing because, "Using a services provider for the data center, rather than running it on our own, will enable The Hartford to support its growth objectives, make the business more resilient and improve service levels," Lapierre said.

The Hartford will realize an undisclosed amount of savings by the outsourcing, but will invest that - and more - in improving its IT capabilities, she said.

The company had said in October it would decide between IBM and Electronic Data Systems Corp. and ask the contract winner to hire at least half of the employees the agreement affects.

Lapierre said those who join IBM will start at their current base salary and will get credit for prior service with The Hartford for vesting in benefits, such as vacation. Also, employees of The Hartford who could qualify now for retirement benefits will be able to receive pension payments from the company while working for IBM, she said.

The standard severance for employees who will be terminated is one week's pay for each year of service at The Hartford, up to a maximum of 52 weeks' pay. The minimum severance will be two weeks' pay. Laid-off workers will also get outplacement help and education benefits, Lapierre said.

Despite the outsourcing, The Hartford is still hiring for certain IT jobs and has more than 100 jobs in that area waiting to be filled in Connecticut, Lapierre said.

The Hartford is trying to fill about 1,100 jobs companywide across a variety of operations.