Rio Tinto, IBM deal spells office layoffs

Rio Tinto has signed a $100 million, 10-year outsourcing deal with tech giant IBM that will eventually terminate an estimated 800 finance, procurement, IT and HR positions.

A Rio spokesman said the cuts would help to reduce costs and improve productivity:

"Our core business is mining and it makes sense to partner with other companies for back office and transactional work."

"We are working with our partners to find opportunities to reduce our costs in support functions like HR, finance, IT and procurement across Rio Tinto's global operations."

Rio is also an industry leader in automation of trucks and trains and has plans worth $518 million for the "world’s first, fully automated, long-distance and heavy-haul rail system operating in 2015."

“[Automation] is going to provide a healthy return on investment for Rio,” said Adrian Wood of Macquarie Group Ltd. “They’re trying to squeeze out those extra few tons a year by automating.”