IT workers at the University of California in San Francisco are being laid off and are expected to train their offshore replacements.

But the layoff, which will happen sometime in February with replacements working from India-based HCL, can potentially affect the entire UC system.

The University of California’s five-year, $50 million contract with HCL states it could be used by any of the 10 universities within the system.

About 24,000 students and 190,000 faculty and staff comprise the West Coast state’s university system.

The San Francisco-based university houses dentistry, medicine, nursing and pharmacy schools, as well as a medical center. It has an IT department with just shy of 600 employees. The layoff is expected to affect roughly 17 percent of its staff.

Of the 17 percent affected are 49 permanent employees, 12 contract employees and 18 vendor contractors, as well as 18 vacant positions.

The university has also relocated some of its IT equipment to a Dell data center in Washington in a separate agreement, which, like the HCL pact, can be used throughout the whole system.

The mindset behind the contracts — which includes another with security provider FireEye — is that it will save UCSF $30 million throughout the next half decade.

UCSF chief information officer Joe Bengfort said declining reimbursement and the impact of the Affordable Healthcare Act has led to some less-than-inviting circumstances, according to an IDG report.

Bengfort said in the report that the previous five years has led to the advent of electronic medical records, which made IT responsible for double the operating expenses, from 3 percent to 6 percent.

As part of the contract, HCL will provide data center monitoring and operations, server, storage, database, middleware and Citrix, as well as network operations, routers, switches, firewalls, load balancers, WLAN controllers.

The university is only outsourcing IT functions widely available in the industry’s service marketplace, according to Bengfort in the IDG report. All the other IT functions involve direct use with the end user.

One cause for concern was data security, but Bengfort insisted the data will remain in the U.S. with offshore contractors’ accessibility to it only through controlled channels.

UCSF employees say the training of the HCL staff has not begun, so they don't know yet if they will be training visa-holding replacements. But HCL, along with many other offshore firms, is considered H-1B dependent under law, the report noted.

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