Loss-making Reader’s Digest Association Inc has signed a cost-cutting oriented $350 million, seven-year IT outsourcing agreement with India’s HCL Technologies.
The agreement is supposed to cover Readerâ€™s Digest Association’s entire IT landscape, spanning the gamut from infrastructure to applications.
IT Support from Coolie Nations
From low wage nations like India and Poland, HCL Technologies will provide IT support to Reader’s Digest Association’s operations across 45 countries and 14 languages covering North America, Latin America, Central and Western Europe and Asia Pacific.
The resulting IT service will be staffed by a combination of HCL Technologies’ on-site staff (more H1Bs?) and remote support, current Reader’s Digest Association IT employees and its IT personnel who are joining HCL.
Reader’s Digest Association’s Senior VP for Global Operations, IT and Business Redesign Albert L. Perruzza boasted thatÂ the deal with HCL Technologies would yield significant savings and bolster the company’s IT capabilities.
We expect to see dramatic reductions in our total IT costs.
Scope of Betrayal
The scope of the agreement is said to include applications developmentÂ and infrastructure support across Oracle Universe, Open Technologies and Mainframe; and Infrastructure support for network, security, storage, end-user computing, Wintel and Unix server management.
HCL Technologies will update IT legacy assets, rebuild and migrate Reader’s Digest Association’s mainframe environment in its New Jersey Data Center and implement a new tools framework to provide business-aligned, unified, real-time visibility into the health of the IT environment.
Lost its Way
Back in the old days, we were diligent readers of the Reader’s Digest. But over the years, the magazine lost its way and its cachet as well.
Today, we wouldn’t want to dirty our bottoms with pages from the Reader’s Digest. Plain junk.
Besides the eponymous magazine, the Reader’s Digest Association publishes a host of other magazines and books.
Layoffs and Losses
In January, Reader’s Digest Association announced plans to fire 8% of its staff citing a drop in consumer spending and magazine advertising.
The company reported a loss of $34.1 million on revenues of $642 million in its fiscal second quarter ended December 31, 2008.