EY to outsource compute function, sending 800 staff into the loving arms of... IBM

Global Service Delivery Centres in Poland, Argentina, India, China and the Philippines all impacted, as are staff in UK and US

Exclusive The artist formerly known as Ernst & Young is preparing to transfer the majority of its in-house compute function to IBM, with 800 people in various corners of the world set to make the move from October onwards.

The pair made public a multi-year alliance last month that was all about selling "digital transformation" services, including hybrid clouds from Red Hat OpenShift, along with Watson, Blockchain, 5G, and edge technologies to business customers.

Yet no mention was made of the outsourcing agreement between them to move over EY staff who manage internal networks, hosting, architecture and build services. Basically, all the people that physically maintain and support infrastructure at EY on a global basis.

Sources close to the matter told us that of the 1,100 or so people in EY's compute unit, 800 are set to make the hop across to IBM and the remaining 300 will remain with EY. Big Blue, we understand, will assume responsibility for a compute managed service for EY.

Compute staff based at EY's Global Delivery Services centres in Poland, Argentina, India, China and the Philippines are all affected by the outsourcing agreement, we are told. These sites were set up some years ago as lower-cost locations. Staff in the UK and US are also impacted.

The value and length of the outsourcing contract in unclear.

The move hasn't gone down well with everyone at EY. "I chose not to work for IBM for a reason and being forced into working for IBM is not my ideal. I'm not hearing many positives, I'll be honest," said one.

IBM has built a reputation in the past five years as a business that isn't scared of running regular redundancy programmes, and EY staff only spoke to us on the condition of anonymity, as some are fearful for their job.

I think we all know that there's likely redundancies at that point

"The promise was that everybody would move over on the same benefits and the same salary and that will be guaranteed by IBM for one year," said an EY source. "And at the end of that year, which would be October 2021, a review will take place. They've not really said what's going to happen, but I think we all know that there's likely redundancies at that point."

The compute team has not supported customers externally before, but under the alliance with IBM, impacted employees told us they will also be expected to support clients externally.

EY, a source said, will retain 300 compute people to provide functional support for product and service planning, strategy, product evaluations, end-of-life and refresh planning, investment planning and service costing, portfolio management reporting, contract management, process governance, risk management and contract management.

The Register has asked IBM to comment.

An EY spokesperson told us: "EY regularly assesses operations and practices to embrace new technology, innovations and operating models for both clients and people. As a leader in IT strategy, it also works with industry leaders via its wider global alliance ecosystem to provide cutting-edge IT services. EY and IBM are working together on a number of initiatives, including expanding innovative hybrid cloud technology and business consulting capabilities to help businesses accelerate digital transformation.

"Following a strategic review, EY is moving certain roles focused on IT infrastructure engineering and operate services to IBM. By leveraging this relationship, EY and IBM have collaborated to ensure these individuals will have access to a broader work environment catered to their strengths and talents, and more relevant and specialized opportunities to support their future career growth." ®

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