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By AP Photo/Marcio Jose Sanchez
BY JOHN COX Californian staff writer email@example.com
A Xerox Corp. affiliate recently notified state officials that it plans to lay off 150 of its Bakersfield employees this summer.
Dallas-based Affiliated Computer Services Inc., acquired in 2010 by Norwalk, Conn.-based Xerox, plans to lay off the employees July 19, according to the California Employment Development Department.
"Due to a client's changing business needs, we have made the difficult but necessary decision to make adjustments to our workforce," Xerox spokesman Alex Charles said in an interview Tuesday.
He declined to identify the client or say how many jobs the company would continue to employ in Bakersfield, other than to say that ACS will maintain a "strong presence" here.
ACS provides customer service and back-office support for various clients on an outsource basis.
The company has managed student loans for the U.S. Department of Education since 1993. In 2003, it won a new, five-year contract that came with the possibility of five one-year extensions. With the options included, the contract was valued at up to $2 billion.
But in June 2009, the department divided the loan servicing contract among four of the company's competitors. ACS appealed the decision but was denied by the U.S. Government Accountability Office in October 2009.
ACS's local offices -- located across 34th Street from Bakersfield Memorial Hospital -- are among several locations that have processed federal student loans, according to company materials.
Federal materials indicate that the accounts of student loan borrowers are scheduled to be transferred from ACS to the four federal contract winners by August.
Back-office outsourcing jobs do not tend to pay very well, but each one supports about three other jobs in the community because of an economic "multiplier" effect, said the dean of Cal State Bakersfield's School of Business and Public Administration, John Emery.
He said the effect on the local economy would be greater if the employees being laid off are what he called "secondary" earners, meaning they live with people who make more money. In such cases, he said, the household stays local but its discretionary spending falls sharply.
When that happens, Emery said, "it sure makes a big difference in your life."