Dairy co-operative Fonterra is set to outsource some New Zealand IT jobs to an Indian company as part of a strategy to cut costs and lift efficiency.
Fonterra's "One Fonterra" strategy, aimed at reducing duplication of backroom support functions such as human resources, information services and finance acrossits various brands and commodity businesses, will see it use Indian company HCL to run some of its IT systems.
Although the company refused to confirm how many staff would be affected by the move, it is understood redundancies will begin at the end of the month. News reports earlier this year suggest the move could potentially affect 130 jobs.
Fonterra executive Greg James said Fonterra staff had been aware of the outsourcing process since mid-2006 and some could potentially move across to HCL's New Zealand-based operations.
"We have always made it clear from the outset that there will be some redundancies and those staff who will be potentially affected have been advised," said James. "We are still working through the recruitment and redeployment processes with many of our staff and are not in a position to comment on what the final number of redundancies may be."
James said HCL would take over maintenance and servicing functions, including SAP and Oracle systems.
Fonterra's contract with IT service provider EDS would not be affected by the new deal.
Fonterra has already cut its New Zealand workforce by nearly 10 per cent, according to the latest annual results for the year to May 31, which show employee numbers have dropped from 11,000 to 10,000.
Speaking at the co-operative's annual meeting last year, chief executive Andrew Ferrier said "One Fonterra" had cut $30 million from overhead costs and expected to deliver a further $100 million in savings over the next three years.
HCL, which describes itself on its website as "one of India's original IT garage start-ups", has been in business since 1976 and turns over US$4.4 billion annually.
