Australia's flagship airline Qantas looks destined to severely prune more IT staff from its ranks after CEO Geoff Dixon told employees no one is safe under yet another full-scale review of staffing at the company.
Announcing a profit of $763 million, the flying kangaroo says it now needs to shave another $1.5 billion from operating costs due to the cost of fuel. "There will be job losses. Everything must be looked at," Dixon told an analyst briefing, refusing to detail where the cuts would be, but indicated managers would be taking the new hard line on how the company will manage its staff to the workforce within a days.
Asked what cuts will be made to Qantas IT staff - many of whom have been with the airline for more than a decade - a Qanatas spokesperson refused to comment on how many job losses will come from IT.
However, at least two market analysts told Computerworld they expected to see job losses of around 5000 as the airline moves to an even more heavily outsourced services model, including information technology.
In November 2004 Qantas CIO Fiona Balfour told a Gartner conference the airline's remaining in-house IT had been substantially reorganised, but cautioned the airline was still "in the early phase of the organisation's learning how to use professional corporate services".
Balfour also said a Qantas IT improvement program, which saw infrastructure and communications outsourced to IBM Global Services and Telstra in May 2004 as a $1 billion deal, remained as a heavy investment in the airline's people.
"The business value is in our applications, not infrastructure," Balfour said at the time.
However, of more than 1000 IT staff, fewer than 200 are understood to have taken positions with IBM Global Services. Speculation the airline had also overestimated savings achievable through outsourcing also came up when Balfour was shunted sideways in a management reshuffle in February 2005.
While Balfour was not available for comment, a Qantas spokesperson confirmed IT costs are now under scrutiny, but stressed this was part of the broader review of operations. The spokesperson refused to comment on whether there would be cuts to Qantas' applications development team, nor whether the airline was considering outsourcing its internal applications team.