In order to boost growth in business process outsourcing [BPO] services, Affiliated Computer Services Inc. (ACS) plans to hire 120 employees at its Houston call center. The company also plans to hire approximately 150 people at its Raleigh call center in addition to the 465 additional positions announced in August.

Based in Dallas, Affiliated Computer delivers comprehensive BPO and information technology (IT) outsourcing solutions as well as system integration services globally to commercial and government clients.

The company’s growing BPO service contributed 84% of fourth quarter revenue, while IT outsourcing contributed 16% of new business signings.

Affiliated Computer continues to bank on areas such as ITO, transportation solutions, transactional BPO and government health care, with modest growth in human resources point solutions, state and local government. Moreover, demand for outsourcing services remains strong.

The company has about 1,450 professionals working in Houston and about 6,000 employees overall in Texas. It currently employs a 2,600 strong workforce in North Carolina.

The company is focused on controlling costs and improving efficiencies. In order to curtail future labor costs, Affiliated Computer is expanding and hiring employees in low-cost regions outside the United States such as India and China.

However, Affiliated Computer faces increased risk in the highly competitive BPO services market from large companies such as International Business Machines (IBM), Cognizant Technology (CTSH) and Computer Sciences Corp. (CSC).

Xerox Corp. (XRX) plans to acquire Affiliated Computer in a cash-and-stock transaction for about $6.4 billion. The transaction is expected to close in the first quarter.

We have a Neutral rating on the stock.

Zacks Investment Research
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