Deutsche Post, HP deal falls through

Deutsche Post World Net has backed out of a planned IT outsourcing mega-deal with Hewlett-Packard worth billions of dollars, reports InformationWeek.

Deutsche Post, the German logistics company and parent to DHL, chose not to finalise the contract after a six-month review found the "benefits, particularly in the early years, do not outweigh the risks", according to an internal memo.

It's a considerable blow to HP, which has had limited success winning IT services megadeals. HP plans to propel itself into the IT services big leagues via the pending acquisition of EDS for $13.9 billion.

As the US economic slump continues, American jobs are increasingly in short supply: the US Labor Department reported on Friday that employers shrunk payrolls by 51 000, says ABC News.

Though the US labour market is contracting, a reduction in some outsourcing and an increase in foreign companies opening new US operations may offer some relief.

But some experts say there is a bright spot on the jobs front: At least a handful of American companies which had relied on workers stationed overseas are now bringing jobs back to the US. In addition, foreign companies are continuing to expand US operations and hiring more local residents, instead of flying in foreign staff for business.

Affiliated Computer Services (ACS) has won a contract extension to continue providing outsourced IT services to Santa Clara, California, writes Washington Technology.

Under the contract, ACS will continue to operate the city's data centre, manage its IT infrastructure, and furnish application and project management services. The company also will provide help-desk and field-service support.

The contract is worth about $5 million, company officials said.