Boeing has distributed layoff notices to several hundred Information Technology (IT) employees in the Puget Sound region, according to The Seattle Times. The big question: Did automation -- or IT outsourcing -- trigger the layoffs?
The answer to that question hasn't been publicly disclosed.
Boeing's staff cuts arrive as corporate IT departments and outsourcing firms struggle to balance resources -- especially amid the push toward more IT automation, managed and cloud services.
Historically speaking, Boeing has depended heavily on outsourcing companies, a strategy that allegedly caused problems with the company's 787 Dreamliner launch.
Amid the current layoffs, it's unclear if or how Boeing will replace the lost IT resources. The aerospace giant had nearly 8,000 IT professionals on staff in 2013, but Boeing has made cuts since that time and relocated many IT positions to other offices, The Seattle Times says.
IT Job Slowdown, Shrinking Outsourcing Pie?
The overall IT job market began showing signs of a slowdown in 2015, with salaries inching up on 1.39 percent and demand for more pros weakening, according to Janco Associates and eJobDescription.com.
Global 2000 companies -- and their IT outsourcing partners -- have felt the pinch. Indeed, the typical enterprise IT outsourcing deal size is shrinking.
For instance, BAE Systems recently outsourced IT operations to CSC for $600 million — less than one-third the size of a similar deal the duo struck in 2005, The Wall Street Journal notes. Moreover, the average size of the top 100 outsourcing deals for 2015 was $392 million — down from $680 million in 2005, according to IDC, the Journal adds.
Amid those realities, both Dell and Hewlett Packard have essentially exited the outsourced IT services markets. Meanwhile, many IT giants have been making staff cuts of their own amid the shift from hardware and software toward cloud and subscription services.
IT Jobs At Microsoft, Amazon?
At first glance, Boeing's displaced IT employees can pursue careers at neighboring companies like Microsoft and Amazon Web Services. But those companies depend heavily on (A) automation and (B) programmers. In stark contrast, IT maintenance skills may not be as highly desired.