Iowa Governor Kim Reynolds has announced that the state will lay off 200 state workers, as part of a plan to transfer the management of state government data and websites from the state government to two private companies.
Reynolds mentioned that the state will contract with Amazon Web Services (AWS) as well as New Jersey-based IT company Cognizant Government Solutions to modernize Iowa’s IT system and save the state more than $525 million over 10 years.
Laid off workers will receive “individualized, competitive job offers” from Cognizant later this month, according to Reynolds’ office. Reynolds said the change is an investment in “security, agility and long‑term value for Iowans.”
“By moving to the cloud, we can protect data more effectively, improve service reliability, and respond quickly as public needs evolve,” Reynolds said in a statement Tuesday.
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“This transition also allows us to adopt a more flexible business model — shifting from large, upfront capital expenditures to scalable services that help the state operate more sustainably for the future,” Reynolds said.
Cognizant will begin providing the state services on Aug. 3. The amount the state will pay to the two companies has not been disclosed. According to the Des Moines Register, Reynolds has touted the changes as a continuation of her administration’s initiative to consolidate and centralize the state’s IT services, stemming from her 2023 restructuring of state agencies.
This move was criticized by Democratic lawmakers in Iowa, who argued it would remove hundreds of public employees from the Iowa Public Employees’ Retirement System, the state’s public employee retirement program.
“Iowa jobs are for Iowans, not corrupt New Jersey tech bros. Laying off 200 Iowa AFSCME members who work hard and get good benefits in favor of out-of-state consultants is outrageous,” Iowa House Minority Leader Brian Meyer said in a statement.
Iowa Senate Minority Leader Janice Weiner linked the move to past efforts, and called it “disastrous.”
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“With just months left in her lame-duck tenure, Gov. Reynolds has made the unilateral decision to disrupt the lives of hundreds of public employees, severing their ties to IPERS and leaving them at the mercy of a private, out-of-state company,” Weiner said in a statement.
The transition is a part of Iowa’s state IT consolidation, which began in 2023. The Iowa Department of Management, Division of Information Technology, is transferring its duties to a managed service provider (MSP) model with the two companies under this.
AWS will shift the state’s data from dozens of data centers and thousands of physical servers to a cloud-based system, while Cognizant Government Solutions will take over daily IT operations for Iowa’s executive branch Iowa Department of Management Director Kraig Paulsen said the change will save taxpayer dollars and more effectively protect state data.
“By moving to a single, secure cloud system, we’re taking our cybersecurity to the next level while reducing the costs that come with maintaining aging technology,” Paulsen said in a statement.