July 30, 2012 / 1:41 PM / 8 years ago

UPDATE 4-Cemex to outsource jobs in biggest Mexican deal for IBM

 * 10-year deal with IBM will save money for Cemex
 * IBM's largest outsourcing deal in Mexico
 * Up to 2,000 jobs could be affected

 (Adds IBM comment, updates stock prices)
 By Cyntia Barrera
 MEXICO CITY, July 30 (Reuters) - Mexico's top cement maker
Cemex is outsourcing jobs worldwide to IBM in a deal that will
help it save $1 billion over 10 years, the latest bid by the
company to trim costs and boost its financial health.
 Cemex, which was swamped by the collapse of the U.S. housing
market after paying out some $16 billion to buy Australian peer
Rinker, has been working its way out of a deep debt hole for the
past three years.
 Cemex Chief Financial Officer Fernando Gonzalez told Reuters
that the deal with International Business Machines Corp 
would likely affect between 1,500 and 2,000 staff, but he said
that was a preliminary estimate. The company did not give
specifics about the types of jobs that would be outsourced. 
 Some jobs may be absorbed by IBM, Gonzalez said. Cemex will
start passing jobs to IBM from September, and the entire
transition should be complete by December 2013.
 "Starting 2014 is when we will have a full year of savings
... that we hope should be of more than $100 million per year,"
Gonzalez said, adding that final numbers for the outsourcing
plan would not be public until later this year.
 The contract is IBM's largest outsourcing deal with a
Mexican company and ranks among the biggest IBM has agreed in
Latin America, said Bob Hoey, general manager for IBM's
integrated technology services business.
 By cutting costs and its debt burden, Cemex is getting back
on its feet. Two weeks ago, the company posted its highest
quarterly operating core profit in nearly three years on a
pickup in its U.S. business. 
 Monterrey-based Cemex employs about 42,000
people worldwide and has operations in over 50 countries.
 IBM will provide Cemex with business process and information
technology services. It will also include finance and
accounting, and human resources back-office services.
 "While $1 billion sounds pretty attractive, and it is
definitely good news for the company, we won't see the real
benefits until they get reflected in their profits," said Norma
Lopez, an analyst with brokerage Multivalores.
 Cemex is extending the maturity on a big chunk of its debt,
which would help it dodge a maturity tsunami of $7.25 billion in
early 2014, as it struggles with a stagnant construction market.
 Cemex has proposed a debt exchange to lenders - selling
assets, a pre-payment and revised financial covenants to gain
breathing space. The proposal, announced in late June, has been
negotiated with half of the creditors.
 The exchange offer is due on Aug. 20. So far, Cemex has
reported strong participation by lenders.
 Gonzalez said Cemex was reviewing operations worldwide to
spot the ones that could be sold entirely, but it is open to
unloading minority stakes, too. He declined to comment on which
operations were being reviewed.
 Cemex shares traded down 2.44 percent to 9.61 pesos on
M onday a fternoon, w hile its New York-traded stock slipped 2.95
percent to $7.23.

 (Reporting By Cyntia Barrera Diaz; Editing by Sofina
Mirza-Reid, Tim Dobbyn and Andre Grenon)
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