September 27, 2019 — RUMOR HAS COS DOWNSIZING IN 2020 AND OPERATIONS TRANSFERRED TO INDIA.
The jungle drums are beating that the company’s Comprehensive Outsourcing Services division will be downsizing in 2020 and the operations transferred to India. The key determinant behind the rumor appears to be the number of major clients whose contracts are expiring.
Will this rumor be considered the “Handwriting on the Wall?”
Roseland, New Jersey-based ADP, one of the largest non-bank payroll and human resource services provider, has announced that they will be closing their Owings Mills, Maryland office and laying of 13 employees commencing on September 27, 2019. According to a company spokesperson, “We continuously monitor our operations for optimization opportunities. Any actions we may take from time to time are part of our usual operations to manage the business strategically. We are very appreciative of the contributions of this team and have support systems in place to help with their transition. We have also arranged to accommodate work from home as appropriate.”
According to a statement accompanying ADP’s fourth quarter and fiscal 2019 results, “ADP remains committed to reinvesting in its product, distribution, and service to drive sustainable growth,” said Kathleen Winters, Chief Financial Officer, ADP. “And we are moving forward with our transformation initiatives as we look to both simplify the organization and enhance our competitive positioning. The company also noted that they completed a voluntary early retirement program with an annualized recurring cost saving of $150 million. Having completed our hiring needs in fiscal 2018, we exited the remainder of our previously identified 68 subscale service locations for an annualized recurring cost saving of approximately $60 million.”
“First, during the fourth quarter of fiscal '19, we recorded a severance charge of approximately $26 million related to a broad-based workforce optimization effort focused on spans of control and management layers throughout the organization. Second, this year we're accelerating our procurement transformation efforts through a number of initiatives aimed at third-party vendors and internal expense management. These two initiatives combined are expected to generate about $100 million of savings in fiscal 2020.”
It is believed that the company is relying on additional cloud-based self-service automation and the desire to reduce expenses by transitioning some employees to a “work at home” model. This is not likely to be the only location affected by ADP’s business plan.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?