Some 500 employees were affected by that deal, with about half moving to Northrop Grumman and half remaining Virginia employees in name, though their salaries and benefits were reimbursed by the company.
"This afternoon it's down to zero, although they'll be on the payroll through the end of the month," said Marcella Williamson, spokeswoman for the Virginia Information Technologies Agency.
The agency works with Northrop Grumman, which won a $2.4 billion, 10-year state IT contract in 2006. The idea was to standardize IT services throughout state agencies and, hopefully, to cut costs. The savings haven't materialized, though the contract has been extended into 2019.
Gov. McAuliffe's administration and state legislators are studying now how to proceed beyond the contract's end, and whether to bring some operations back in house.
Williamson said the employees laid off Tuesday will get state severance packages paid for by Northrop Grumman. The changes won't cost or save the state money, and because Northrop Grumman's contract is based on service level targets, service shouldn't be affected, Williamson said.
The layoffs were "a Northrop Grumman business decision," Williamson said, not a state decision.
A company spokeswoman said in a statement that the layoffs were a result of a routine review of staffing level and skill needs.
"This type of review is critical to providing the best service to the Virginia's citizens in the most effective manner," spokeswoman Liz Shrum said in an email. "As a result of those reviews, a workforce adjustment has taken place, employees have been offered severance packages, based on their years of service, as well as access to outplacement services and early retirement options."
Williamson said many of these employees were near retirement age. Those who want to keep working will have a chance to compete for other state jobs, she said.
Many of the 250 or so state jobs Northrop Grumman initially managed were closed out by attrition during the lifetime of the privatization deal, but Williamson said there have been some "much smaller" layoffs before this week.
©2015 the Daily Press (Newport News, Va.), Distributed by Tribune Content Agency, LLC.
