September 27, 2006, 12:00 AM

Federated consolidates data centers

Federated will streamline two information technology centers as the company reduces duplication in its I.T. organization. Data center consolidations are consistent with Federated`s goal to cut costs by $175 million in 2006, the company says.

Federated Department Stores Inc. is consolidating its multiple data centers.

Federated, which acquired The May Department Stores Co. in August 2005, will streamline two former May information technology centers in St. Louis and Lorain, Ohio, as the company reduces duplication and excess capacity in its I.T. organization.

A total of about 290 computer operations and systems development positions will be eliminated in the consolidation. A phase-out will begin in early January and will be completed by June 30, Federated says.

The St. Louis data center will be closed, affecting a systems development and computer operations staff of 195 employees. If they choose to transfer, non-managerial personnel will be offered positions at Federated Systems Group in Duluth, Ga.

At Lorain, about 95 employees are affected as most computer operations and the help desk portions of the data center are now closed. However, the systems development group, which includes about 125 positions, will remain in Lorain, which will serve as a programming center for Federated`s various back-end and e-commerce systems. In addition, a small I.T. staff will remain in Lorain to support computer operations and business continuity.

Data center consolidations are consistent with Federated`s previously announced estimates to cut its I.T. costs by $175 million in 2006 and at least $450 million in annual operating costs in 2007 and beyond as a result of the merger with May Department Stores, the company says. Federated is No. 29 in the Internet Retailer Top 500 Guide to Retail Web Sites.

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