American Outsources HR to IBM

American Airlines has awarded IBM a $217 million seven-and-a-half-year human resources outsourcing contract.

As part of the agreement, IBM will provide American Airlines support for standardized human resources processes including training, recruitment and staffing, and HR-related information technology and call center support.

IBM is partnering with Mercer HR Services, a subsidiary of Mercer Human Resources Consulting, to provide American’s employees with health and benefit, pension plan, and compensation administration services.

American expects to save $60 million over the length of the contract, according to a company spokesperson.

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American’s new contract with IBM will affect about 200 employees. Almost 20 will transfer to IBM, and the other jobs will be phased out over 18 to 24 months.

American says it will offer jobs to the displaced workers and does not expect any layoffs across these job functions.

Headquartered in Ft. Worth, Texas, American Airlines has 88,000 employees across the United States and Canada.

Elaine Rigoli has nearly 15 years of experience managing content and community for various B2B and consumer websites. Elaine has written thousands of business and technology articles and has been quoted in The Wall Street Journal and eWeek, among other publications.

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