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Jobs to go as Rio Tinto signs $100m outsourcing deal with IBM

Jobs to go as Rio Tinto signs $100m outsourcing deal with IBM

21 Oct 2013 | The Australian Financial Review

Mining giant Rio Tinto has signed a back-office outsourcing deal with US tech player IBM, which is believed to be worth up to $100 million and will see the company shed between 700 and 800 positions globally. The contracts could run for up to a decade, netting IBM $100 million. The work will be taken on largely in the new year, but some transitioning has begun and affected Rio staff are believed to have been informed.

Managing Director of niche outsourcing advisory firm Mindfields Mohit Sharma said Rio was missing a trick in pursuing a standard outsourcing model, and the company could have got the same service and made a profit by selling its back office to a supplier. “Rio should have monetised their [finance and accounting] operations by carving it out, he said ... IBM recently made an unsolicited bid for Qantas’s F&A operations for carving it out, so they would have been interested.”

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