Boeing outsources to Dell affecting 600 IT jobs

Boeing is outsourcing IT support to Dell, affecting hundreds of IT jobs at the US aircraft manufacturer, after the Covid-19 pandemic forced it to accelerate existing plans.

According to The Seattle Times, Boeing CIO Susan Doniz informed staff in an internal message that 600 jobs were being outsourced to Dell.

Doniz said while the changes were not a consequence of the Covid-19 pandemic and the economic slowdown it has wreaked, the process had been accelerated.

“This is a change we would have made even without a global pandemic,” wrote Doniz. But she added that the impact of Covid-19 on the aerospace industry had “certainly quickened our pace”.

Affected staff – about 10% of the manufacturer’s IT workforce – must either find different work within Boeing, apply to work for Dell, or be laid off, she wrote.

Capabilities being outsourced include support of cloud services, databases, IT security and users.

The airline industry was hit early and hard by the economic slowdown and disruption caused by the Covid-19 pandemic. The travel and transportation industries almost ground to a halt early on, with continued restrictions limiting recovery, particularly for the travel sector.

The IT services sector was also hit by a sudden slowdown but has recovered as enterprises see it as a means to prepare for life after Covid-19.

This is highlighted by the fact that demand for IT services has picked up, after a lull early in the pandemic. According to the latest figures from ISG, which records all deals worth $5m or more, total global spend reached $59.8bn in 2020, up 7% from 2019. Cloud-based as-a-service contracts saw the biggest growth in terms of value, reaching about $33bn, a rise of 17% on the previous year.

Businesses are changing the way they operate to enable more remote working and boost resilience alongside existing digital transformations.

Boeing’s main competitor, Airbus, this week signed a five-year deal with Indian IT services giant HCL to deliver digital workforce services. The services provide a modernised digital workplace to most of the airline manufacturer’s staff globally.

“The combination of HCL’s scale, transformational expertise and management capabilities of IT and operational technology landscapes will enable Airbus to remain at the forefront of innovation and deliver leading-edge user experiences,” said Sandeep Saxena, executive vice-president for the UK and Ireland, France and Benelux at HCL Technologies.

HCL said there will be no no staff transfer from Airbus as part of the deal and that services will be delivered from France, Germany, UK, Spain and India.

Peter Schumacher, CEO at management consultancy The Value Leadership Group, which specialises in outsourcing, said Airbus working with HCL was not surprising given that “most of the major aerospace companies, including Safran, Honeywell and Dassault Systemes, have large Indian engineering centres and deep relationships with Indian engineering and IT services companies”.

For example, Boeing has a large engineering centre in Bangalore. “By being in Bangalore, these companies are gaining new options and possibilities that result from combining different skillsets across a spectrum of advanced software technologies,” said Schumacher.

“3D visualisation is just one such example where they are leveraging expertise in virtual and augmented reality software solutions developed by the large presence of gaming and animation companies in Bangalore,” he added. “By being present in the ecosystem, companies can develop the strategic knowledge and insights needed to create important new advantages by leveraging the many synergies embedded throughout the ecosystem.”