Electronics retailer Best Buy Co. is the latest U.S. company to farm out the operation of an entire department to a third party with an eye to using lower-paid foreign workers.
Under a deal disclosed Tuesday, IT services vendor EDS will take over the operation of Best Buy's internal help-desk and problem-management services. The services are aimed at providing computer support to in-store and corporate staffers at Best Buy. To fulfill the deal, terms of which weren't disclosed, EDS is hiring 50 workers at its services center in Winnipeg, Manitoba.
Best Buy is far from alone in its desire to shift work to low-cost centers. Research indicates that a growing number of big companies are taking advantage of so-called offshore business-process outsourcing. According to research firm Gartner, offshore BPO sales will jump 38% this year to $1.8 billion.
However, the practice is becoming increasingly controversial as companies move work out of the country at a time when the outlook for many U.S. workers remains bleak. As a result, companies are typically tight-lipped when it comes to discussing their offshore-outsourcing plans or engagements. An EDS spokeswoman said she couldn't provide further details about the Best Buy contract "due to our agreement with Best Buy."
Best Buy officials were not immediately available for comment.
Best Buy's outsourcing deal with EDS is the retailer's latest move in an effort to establish a bigger footprint in low-cost service and manufacturing centers. Last week, the company opened its first global sourcing office in Shanghai, China. The 25-person office will work to help Best Buy establish closer ties with Chinese electronics manufacturers.