One of the world's biggest technology companies will open a New Orleans office early next year that will eventually employ 2,000 people, officials said Monday, calling it the single largest jobs announcement in the city's history.
The news, announced at the Mercedes-Benz Superdome, comes nearly a decade after state and local officials began trying to position Louisiana and New Orleans in particular as a fledgling technology hub, using tax credits as a recruitment tool and the city's culture as a key selling point.
One of the world's biggest technology companies will open a New Orleans office, officials said Monday.
The Virginia-based company, DXC Technology, describes itself as an "end-to-end IT services company," providing technology and consulting services for businesses and governments. It was formed this year as the result of a merger of CSC and the enterprise services business of Hewlett Packard Enterprises.
With 2,000 jobs, DXC will be among the metro area's largest employers. The company is still settling on a site for its offices somewhere in the Central Business District; it expects to finalize plans in the coming weeks.
The jobs, which are expected to pay $63,000 annually on average, aren't exclusively tech jobs. They include positions such as project managers, business analysts, software developers and engineers.
Valued at more than $25 billion, DXC is about the 110th largest company in the world, with 170,000 global employees and nearly 6,000 clients.
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The company chose New Orleans from among more than 30 potential U.S. cities in a process that lasted several months.
Though the new office won't carry the prestige of a headquarters, DXC views its New Orleans expansion as a major site, to go along with other U.S. operations in cities such as El Paso and Plano, in Texas, and Pontiac, Michigan, officials said.
To land the deal, Louisiana Economic Development offered DXC an incentive package valued at about $115 million. As part of that, the state will fund a $25 million initiative aimed at expanding the number of degrees that Louisiana colleges and universities award annually in science, technology, engineering and math.
That effort is intended to help the company recruit talented workers and develop technology training programs and ongoing learning opportunities for employees, DXC said. The effort will be led primarily by LSU, the University of New Orleans, Delgado Community College and Southeastern Louisiana University in Hammond.
DXC's local operation is dubbed a Digital Transformation Center, where employees will focus on developing and delivering innovative approaches and solutions for clients in areas including cloud computing, cyber security and data analytics.
"We're a digital transformation company. What it means is that we help our customers navigate their transitional journey around technology," said Elcio Barcelos, DXC's senior vice president of human resources.
The expansion into New Orleans of a big national technology company is welcome news anytime, as Louisiana continues to grow its national footp…
New Orleans met the company's criteria in a few ways, Barcelos said. DXC wanted a city that could supply a talented workforce, particularly one with a large population that's in the millennial age bracket and interested in technology.
The company also praised Louisiana's "business friendly" climate as well as a state higher education network that is willing to work with DXC on job training.
"Obviously, there are many universities across the U.S. that would give us the supply," Barcelos said, "but how many would actually be willing to go toe-to-toe with us and build this strong relationship early on?"
Monday's announcement drew a crowd of business leaders, lawmakers and city and state officials, including Gov. John Bel Edwards, all eager to celebrate the city's latest catch.
In an interview, Mayor Mitch Landrieu called the announcement "a dramatic culmination of eight years of a lot of hard work on re-creating our economy." And he predicted it will send a signal to other companies looking to expand.
"As you've seen in other cities, once a flag is planted, it's what comes after that is incredible," he said.
Economic Development Secretary Don Pierson took some time to ensure that the crowd had at least a working idea of what DXC does, beyond just the magnitude of the project.
"Technology is moving more rapidly than ever before. We're in the age of acceleration. When you roll that across every industry that you can think of — manufacturing, service providers, financial services, insurance, every consumer product imaginable — you begin to get the full picture," Pierson said. "The technology around digital transformation will change the way things are accomplished and made in ways that we cannot even imagine today."
The company's clients include Team Penske, which hired it to help streamline tasks and data for the American auto racing team's engineers. It also worked with the German airline Lufthansa to make data more readily available to software developers to improve traveler services.
DXC plans to fill 300 jobs — largely information technology and business positions — in 2018, then ramp up to 2,000 jobs over five years. Its local payroll is expected to exceed $133 million by 2025.
The company's incentive package also includes $18.7 million in performance-based grants, payable over five years and covering some of its initial costs.
In addition, DXC is expected to tap off-the-shelf benefits the state regularly offers to qualifying businesses, including LED's workforce training program and the state’s Quality Jobs Program, which provides a cash rebate of up to 6 percent of a company's annual payroll for as long as a decade. If it meets projections, DXC's payroll rebate could be worth $57 million over a decade.
Separately, New Orleans plans to kick in between $5 million and $8 million over a decade, officials said. Final details of that are still being worked out.
There are about 16,500 digital media employees in the metro region, and Monday's announcement will push that total up by about 12 percent.
The announcement comes about five years after the finance arm of General Electric Co. announced that it would open an information technology center in New Orleans, bringing 300 high-tech jobs to the city.
At the time, that deal was viewed as a landmark in Louisiana's efforts to recruit high-tech companies, including Electronic Arts, Gameloft and IBM.
Now, economic development officials hope the latest announcement will add to that momentum.
"It's going to empathetically establish the New Orleans market as an emerging tech hub, and because of the money that's being invested in higher education, and because of the number of jobs that they're hiring, it's going to significantly grow the labor market here, which should benefit all technology firms," said Michael Hecht, president and CEO of GNO Inc., a regional economic development group that played a key role in landing the project.