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September 20, 1994

Contracting out white-collar jobs continues to gain steam.

Peco Energy Co., a Philadelphia-area utility, expects to save millions of dollars by sending work to outside vendors. First step: the information-systems division, being cut in half to 200 workers. Health-care giant Johnson & Johnson says it plans to contract out its benefits department to management consultants Towers Perrin.

Phillips Petroleum Co., Bartlesville, Okla., has contracted out the administration of employee-benefits plans, engineering design, computer programming, employee relocation and some research and development. In an innovative twist, Freeport McMoRan Inc. of New Orleans contracted out to former employees its industrial-film department and set up a revenue-sharing plan with them.

But Atlantic Richfield Co. says it does little contracting out. "You still have to manage, so there's not much savings there," says Mike Mullen, manayer of personnel resources.

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