More than 200 Iowa state IT workers laid off as Reynolds administration outsources technology operations
By Pepper Purpura
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DES MOINES, Iowa (KCCI) — More than 200 Iowa state information technology employees are losing their jobs after Gov. Kim Reynolds announced Tuesday that the state will outsource much of its technology infrastructure and operations to Amazon Web Services and Cognizant Government Solutions.
According to the governor’s office, the state will move the executive branch’s data from state-operated servers to Amazon Web Services’ cloud platform. Cognizant Government Solutions will assume responsibility for many day-to-day IT operations, including managing servers and networks, providing on-site technical support and handling employee IT support requests.
The Reynolds administration says the transition will save taxpayers more than $525 million over the next decade.
“In 2022, I directed the first comprehensive review of state government in 40 years, and since then, my administration has been focused on continuously improving government efficiency and effectiveness,” Reynolds said in a news release. “One of the most important strategic initiatives we’ve undertaken since was the consolidation and centralization of all IT resources across state government.”
State officials said approximately 200 employees currently providing IT operations services will receive employment offers from Cognizant Government Solutions.
For employees like Ryan Klares, the announcement was surprising, but not unforeseen.
“I’m in, like, a state of shock,” Klares said. “I saw the writing on the wall, like, back in 2023, when realignment started with the Department of Management.”
Klares is one of more than 200 employees in Iowa’s Division of Information Technology whose state employment will end July 31 as part of the transition.
Retirement benefits lost Klares said one of the primary reasons he joined state government was the retirement and benefits package offered through public employment.
“There were numerous other job opportunities that came to me that I did apply for and go through and did turn down because of, at the end of the day, the benefits and the retirement and everything that the state had to offer,” Klares said.
According to information provided to employees and information published by the Iowa Public Employees’ Retirement System, members generally must be vested before retaining employer-funded retirement benefits.
Klares said he has accumulated roughly $18,000 in employer retirement contributions that will be lost because his tenure was only four years.
The state says Cognizant Government Solutions will offer affected employees jobs at no less than their current compensation levels. However, Klares says that offer does not include benefits.
State says outsourcing will save money and modernize systems The governor’s office said the transition is part of a broader effort to modernize Iowa’s technology infrastructure.
According to the administration, Amazon Web Services will transition dozens of state data centers and thousands of physical servers into a cloud environment. State officials say the move will improve cybersecurity, reliability and long-term efficiency.
The Department of Management spokesperson Gloria Van Rees said the department plans to hire about 40 new state positions as Iowa transitions to the managed-service-provider model, and the state’s remaining IT workforce will focus on “setting IT strategy, measuring results, and driving innovation for the State.” The pool of employees being laid off is eligible for those roles.
Van Rees also explained how the projected savings estimate was decided.
“The projected savings came from cost comparison between current DOM IT rates and new Cognizant/AWS rates,” Van Rees wrote. “The DOM IT rates include personnel, hardware, data and infrastructure all rolled up into a billable rate charged to state agencies.”
Employee questions service impacts While state officials say the new model will improve efficiency, some employees worry outsourcing could negatively affect service for state agencies.
Klares pointed to previous changes in Iowa’s IT structure, saying additional layers of support sometimes delayed responses to technical problems.
“Sometimes it can take upwards of two plus days before we even get the tickets. And it’s something that I can go up there and fix in the matter of five or ten minutes,” Klares said.
The Department of Management has said Cognizant Government Solutions will begin providing services for the state in August.
According to communications sent to affected employees, workers will receive individualized employment offers from Cognizant and may also apply for newly created state positions tied to the new technology oversight model.
Full statement from Gov. Reynolds Reynolds provided the following statement Wednesday:
“The state of Iowa and Cognizant Government Solutions have been fully committed from the onset of this project to employing an Iowa-based workforce throughout the duration of our engagement. At no point during our negotiations was it even considered to employ H-1B visa holders. The state’s daily IT operations will continue to be supported by Iowans, for Iowans, as it is now.
“Part of the state’s negotiations with Cognizant Government Solutions was their guarantee to offer equal or better employment to the approximately 200 state employees who today provide the IT services that Cognizant Government Solutions will manage going forward. This ensures continuity and consistency for the IT workforce that serves state government and the state agencies who rely on them.
“IT operations is not a core function of state government and transitioning to a managed service provider model — especially one that includes Cognizant Government Solutions and Amazon Web Services, two world-class leaders in the tech industry — is necessary to ensure the integrity, security, and efficiency of Iowa’s data and systems.”
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