Re: Well IBM is one problem
With IT requiring fewer human resources over time to manage, outsourcing can spare a company money, if it is handled properly.
They either need to employ too many people or they need to make them redundant, which if they have been with the company for a long time can be expensive.
Theoretically, the outsourcer can manage the contract with fewer staff and reallocate the rest to other projects, minimizing the redundancies. That certainly worked well on a couple of projects I was involved with. In one, from the around 1,200 staff brought over, nearly 1,100 were still working for the company 10 years later. That was the highest retention/loyalty rate the company had ever seen with any of its outsourcing projects. They were re-allocated to projects elsewhere in the company and were well integrated.
It was only after a downsizing of the whole company 15 years after that outsourcing that a lot of those original employees left.
On the other hand, you have outsourcing that tries to constructively get people to leave after they've been outsourced and move more and more of the contract to cheaper (usually overseas) offices.
For a non-IT company, outsourcing a large pool of IT staff it no longer needs can make economic sense.
As an IT employee, if it is done like the first type, which I experienced, it can be a very positive experience, opening up new avenues, without having to look for a new job and not losing your length of service benefits. If it is just done as a money grab and a way to get rid of employees that neither company wants, it is a very bad thing. Unless the outsourcer has a bad reputation already, it is often a gamble, as to whether it will be a good or bad thing.