Reynolds: State IT jobs will be filled by Iowans after privatization move

Iowa Gov. Kim Reynolds said Wednesday the state is committed to maintaining an Iowa-based workforce after contracting with private companies to manage state government data, servers and websites — a move that will result in the layoff of 200 state employees.

Reynolds announced Tuesday the state would contract with Amazon Web Services and Cognizant Government Solutions to oversee, power and modernize its information technology system, which is currently run by physical servers and multiple data centers.

In the new system, executive branch data for the state will be store in a cloud environment through Amazon Web Services. Cognizant Government Solutions, a part of the larger New Jersey-based IT company Cognizant, would oversee “day-to-day” IT operations, performing duties from server, network and system management to tech support for agencies and employees.

According to a state news release, the change will save Iowa more than $525 million in the coming decade. Reynolds linked the change to her other efforts to make state government more efficient, saying it builds off work that started with the state agency restructuring law she signed in 2023.

“One of the most important strategic initiatives we’ve undertaken since was the consolidation and centralization of all IT resources across state government,” Reynolds said in a statement. “Now that it’s complete, we’re able to take a critical step forward to modernize the state’s legacy data systems, partnering with two of today’s leading technology providers.”

The contract also will result in the loss of 200 state jobs for workers currently employed by the Iowa Division of Information Technology performing IT services. Though the initial news release said these laid off workers “will receive individualized, competitive job offers from Cognizant Government Solutions later this month,” Democrats criticized the move as a “government privatization scheme.”

“Iowa jobs are for Iowans, not corrupt New Jersey tech bros,” House Minority Leader Brian Meyer said in a statement Tuesday. “Laying off 200 Iowa AFSCME members who work hard and get good benefits in favor of out-of-state consultants is outrageous.”

Meyer also said it was “disappointing” Reynolds was working with Cognizant specifically, as the business and two executives had been charged with crimes related to violations of the Foreign Corrupt Practices Act. The corporation agreed to pay $25 million to settle the charges in 2019.

Republican gubernatorial candidate Zach Lahn also weighed in on the decision on X , responding to a post citing information from LayoffHedge, a layoff tracker, that called Cognizant the third highest employer of H-1B visa holders in the country, and Amazon the second highest H-1B employer.

Lahn has said if elected governor, he would place more restrictions on workers with H-1B visas — a type of nonimmigrant U.S. work visa for specialized professionals. In one campaign ad, Lahn said he would support banning H-1B visa holders from being employed by the Iowa state government and universities, alongside requiring state contracts include information on how many Iowans would be hired versus foreign, legal workers.

Responding to a post on state contracts with AWS and Cognizant, Lahn wrote,”As governor, state contracts will not go to H1B outsourcing firms.”

“To go further, a major criteria for competitiveness for any state contact will be what percentage of the workforce is made up of Iowans,” Lahn wrote in the social media post. “Want to be competitive? Hire more Iowans.”

Reynolds pushed back against this characterization in a Wednesday statement, saying “at no point during our negotiations was it even considered to employ H-1B visa holders.”

She also emphasized that negotiations with Cognizant included a guarantee from the company “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.”