800 Rio jobs to go as it outsources to IBM

Rio Tinto is expected to cut around 800 jobs globally after it signed a $100 million back-office outsourcing deal with US technology giant IBM.

Jobs in areas such as human resources, finance, information technology and procurement are set to be affected, however there has been no word on how many Australian positions will go.

The AFR reports most of the English language work will move to IBM operations in India, eastern Europe and South America.

A Rio spokesman said the deal was aimed at removing roles which did not represent the company’s core business.

“Like others in the mining industry, Rio Tinto is facing the challenge of increasing costs. We are actively seeking ways to reduce costs and improve productivity across the company,” the spokesman said.

“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.”

The move comes as Rio pushes ahead with plans to slash its operating and support costs by $4.81 billion.

Chief of the company, Sam Walsh, has previously said divestments, the sale of non-core assets and the reduction of operating costs would all centre in the company’s efforts to improve its bottom dollar.

This year the company has cut jobs at its WA iron ore operations, 78 positions went from its Argyle diamond mine while positions have also been axed from the miner’s Hunter Valley coal projects.

Its Oyu Tolgoi mine in Mongolia has axed 1700 workers, while the company’s head office in London saw 200 people depart.

While in operation sales the company’s Blair Athol mine has been sold, along with the its 80 per cent stake in the Northparkes copper mine.

The miner is also looking to cut 80 per cent of its stake in Coal & Allied to 51 per cent.

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