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March 14, 2018

DXC Technology will create another 1,600 local jobs: GNO Inc.

Greater New Orleans Inc. CEO Michael Hecht painted a rosy view of the economic effects of the new technology company setting up shop at the New Orleans City Council’s Economic Development Committee on Tuesday (March 13).

Hecht, city and state officials have been trumpeting the deal with DXC Technology since it was announced in November, describing the 2,000 jobs the company will bring to New Orleans as historic and game-changing. But Hecht had more good news for the council on Tuesday, based on projections of the overall impact GNO Inc. has run since the deal was announced.

In addition to the 2,000 jobs, Hecht told the council that nearly 1,600 indirect jobs will be created in addition to those already promised:

  • 649 “indirect” jobs, defined as jobs created as local industries buy goods and services from other industries.
  • 945 “induced” jobs, which GNO describes as jobs created through the “re-spending of income.” This means that as new workers spend the money they make, they create new jobs in the process.
  • GNO also released an estimate of how much labor income would be generated by all three categories — direct, indirect and induced — and said the number
    could be as high as $267 million.

Caitlin Berni, GNO Inc.’s vice president of policy and communications, said in an email that Hecht’s updated job projections were calculated with computer modeling software called Implan. The software used key information that includes data about income and jobs to determine how much impact the DXC deal will have in New Orleans.

GNO Inc. also projects DXC’s arrival will generate as much as $8.2 million annually in local taxes. Those gains will take some time to show up, however, as all 2,000 jobs aren’t expected to be realized until 2024.

Even so, Hecht said that the city should be pleased with having such a large economic development win in 2017.

“We’re also seeing around the country now the validation that this is giving us,” Hecht said. “This project was named the No. 2 economic development project in the country last year, behind a small, little Apple-Foxconn project for about $3 billion.

“Damn you, Scott Walker,” Hecht joked, referencing the Wisconsin governor who secured the deal for his state.

The council committee was getting an update on the project Tuesday before it approved incentive payments to DXC. Combined with contributions from the city’s Industrial Development Board that were approved later in the day, New Orleans could steer as much as $6.5 million over 10 years to the company, subject to it meeting its job creation targets. The full City Council votes next on the incentives.

The total state funding commitment to the DXC deal is $120 million, half of which is a performance-based quality jobs reimbursement. The package gives $25 million to area colleges and universities — Delgado Community College, the University of New Orleans, Southern University New Orleans, Southeastern Louisiana University and LSU — to help train tech industry workers. Most of the remainder will go to the state’s Fast Start job training program.

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