The parent company of Blue Cross & Blue Shield of Illinois is planning to lay off 70% of its IT infrastructure staff and offshore the jobs to a foreign country, according to a trade magazine for technology workers.
“Employees anticipate that the IT work will be moved offshore, and that they will be training their replacements,” Computerworld said in an article published yesterday. “They are concerned that the outsourcing will follow the playbook used at other companies, where employees train H-1B visa holders brought in by contractors, and that the training must be completed as a condition of severance.”
The layoffs could affect 540 people on the IT infrastructure staff, which handles maintenance of systems and similar tasks, and Computerworld wrote they will happen from February to April. In early September, Health Care Service Corp. offered early buyouts to employees older than 50.
Chicago-based HCSC declined to confirm the layoffs but said in a statement that “we are modernizing our information technology systems, developing critical skills and capabilities within our IT workforce, and building strong collaborative partnerships with our business colleagues.”
HCSC employs 22,000 people and sells health insurance under the Blue Cross Blue Shield brand in five states: Illinois, Texas, New Mexico, Oklahoma and Montana. It operates two large data centers in Waukegan, Ill., and Richardson, Texas.
The company said it is moving toward “a blended operating model” where “strategic business partners” would handle basic operational tasks. Critical strategy and design work would be performed by HCSC employees.
The move comes at a moment when anxiety around offshoring of U.S. middle-income jobs has become a major topic in the presidential election. Republican candidate Donald Trump has pledged to halt the removal of jobs to Mexico and elsewhere, and Democrat Hillary Clinton has reversed course on the proposed Pacific trade pact.
Over the past five and a half years, companies either offshored or planned to relocate 5,587 positions from Illinois to foreign locales, according to a Crain's analysis in May of U.S. Labor Department data.
In 2015 Blue Cross & Blue Shield of Illinois lost $488 million on individual health plans, known as the retail market, including products sold on the Obamacare exchange. The company set premiums too low in the first two years of the Affordable Care Act and misjudged how much care the newly insureds would actually use. For 2017, it is resetting premiums much higher in hopes of halting the financial losses.
News of the layoffs has started to appear on Glassdoor.com, which allows rank-and-file workers to evaluate the pros and cons of working at their employer. In the past month or so, employee comments on the HCSC Glassdoor site have turned sharply negative.