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VOL. 124 | NO. 43 | Wednesday, March 04, 2009

ServiceMaster Cuts 155 Memphis Jobs

By Andy Meek

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As an outgrowth of the announcement in December that Memphis-based ServiceMaster Co. would be outsourcing some of its information technology services to IBM, 155 ServiceMaster employees will be let go in the coming weeks.

ServiceMaster, which employs about 32,000 people nationwide, has a little more than 2,000 employees in the Bluff City. Most of the 155 employees being let go work in Memphis.

ServiceMaster informed the Tennessee Department of Labor and Workforce Development last month the employees would be laid off between March 21 and July 31. In all, 275 positions are being cut from the company’s IT department, and that number includes 50 employees transitioning to similar positions at IBM, 70 open positions being shed and the remaining 155 employees being laid off.

ServiceMaster is providing severance and outplacement support to the displaced employees as well as career counseling and a job fair the company will conduct in April. Employees also have been assured they will get no fewer than 60 days’ notice before their jobs are cut.

“We are pursuing those strategies and initiatives that will drive top-line and bottom-line growth through cost savings, new products and services, more innovation and better customer service,” said ServiceMaster spokeswoman Gina Kamler. “As we work to ensure we have the right processes and people in place, we have made the very difficult decision to outsource certain IT functions in order to allow for increased focus on IT strategy, managing our core business and customer support capabilities.”

ServiceMaster reached the agreement in early December for IBM to begin providing IT services for an initial term of seven years. The agreement included a phase-in period of six months for the transfer of services to IBM.

ServiceMaster, which moved its corporate headquarters to Memphis in 2007 from Downers Grove, Ill., also was acquired that year by private equity firm Clayton, Dubilier & Rice. The following year, ServiceMaster began shaving its headcount by several hundred employees, including its move to outsource IT functions.

IBM was selected as the IT provider after consideration was given to several vendors over a period of six months, according to ServiceMaster CEO Patrick Spainhour.

“We are proud that our company has performed well under some of the toughest economic challenges in decades, but we recognize that we must have plans in place to continue building on the strong market-leading positions of each of our brands over the next few years,” Kamler said.

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