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NY Times, June 4 2015
Pink Slips at Disney. But First, Training Foreign Replacements.
By JULIA PRESTON
ORLANDO, Fla. — The employees who kept the data systems humming in the
vast Walt Disney fantasy fief did not suspect trouble when they were
suddenly summoned to meetings with their boss.
While families rode the Seven Dwarfs Mine Train and searched for Nemo on
clamobiles in the theme parks, these workers monitored computers in
industrial buildings nearby, making sure millions of Walt Disney World
ticket sales, store purchases and hotel reservations went through
without a hitch. Some were performing so well that they thought they had
been called in for bonuses.
Instead, about 250 Disney employees were told in late October that they
would be laid off. Many of their jobs were transferred to immigrants on
temporary visas for highly skilled technical workers, who were brought
in by an outsourcing firm based in India. Over the next three months,
some Disney employees were required to train their replacements to do
the jobs they had lost.
“I just couldn’t believe they could fly people in to sit at our desks
and take over our jobs exactly,” said one former worker, an American in
his 40s who remains unemployed since his last day at Disney on Jan. 30.
“It was so humiliating to train somebody else to take over your job. I
still can’t grasp it.”
Disney executives said that the layoffs were part of a reorganization,
and that the company opened more positions than it eliminated.
But the layoffs at Disney and at other companies, including the Southern
California Edison power utility, are raising new questions about how
businesses and outsourcing companies are using the temporary visas,
known as H-1B, to place immigrants in technology jobs in the United
States. These visas are at the center of a fierce debate in Congress
over whether they complement American workers or displace them.
According to federal guidelines, the visas are intended for foreigners
with advanced science or computer skills to fill discrete positions when
American workers with those skills cannot be found. Their use, the
guidelines say, should not “adversely affect the wages and working
conditions” of Americans. Because of legal loopholes, however, in
practice, companies do not have to recruit American workers first or
guarantee that Americans will not be displaced.
Too often, critics say, the visas are being used to bring in immigrants
to do the work of Americans for less money, with laid-off American
workers having to train their replacements.
“The program has created a highly lucrative business model of bringing
in cheaper H-1B workers to substitute for Americans,” said Ronil Hira, a
professor of public policy at Howard University who studies visa
programs and has testified before Congress about H-1B visas.
A limited number of the visas, 85,000, are granted each year, and they
are in high demand. Technology giants like Microsoft, Facebook and
Google repeatedly press for increases in the annual quotas, saying there
are not enough Americans with the skills they need.
Many American companies use H-1B visas to bring in small numbers of
foreigners for openings demanding specialized skills, according to
official reports. But for years, most top recipients of the visas have
been outsourcing or consulting firms based in India, or their American
subsidiaries, which import workers for large contracts to take over
entire in-house technology units — and to cut costs. The immigrants are
employees of the outsourcing companies.
In 2013, those firms — including Infosys, Tata Consultancy Services and
HCL America, the company hired by Disney — were six of the top 10
companies granted H-1Bs, with each one receiving more than 1,000 visas.
H-1B immigrants work for less than American tech workers, Professor Hira
said at a hearing in March of the Senate Judiciary Committee, because of
weaknesses in wage regulations. The savings have been 25 percent to 49
percent in recent cases, he told lawmakers.
In a letter in April to top federal authorities in charge of
immigration, a bipartisan group of senators called for an investigation
of recent “H-1B-driven layoffs,” saying, “Their frequency seems to have
increased dramatically in the past year alone.”
Last year, Southern California Edison began 540 technology layoffs while
hiring two Indian outsourcing firms for much of the work. Three
Americans who had lost jobs told Senate lawmakers that many of those
being laid off had to teach immigrants to perform their functions.
In a statement, the utility said the layoffs were “a difficult business
decision,” part of a plan “to focus on making significant, strategic
changes that can benefit our customers.” It noted that some workers
hired by the outsourcing firms were Americans.
Fossil, a fashion watchmaker, said it would lay off more than 100
technology employees in Texas this year, transferring the work to
Infosys. The company is planning “knowledge sharing” between the
laid-off employees and about 25 new Infosys workers, including
immigrants, who will take jobs in Dallas. Fossil is outsourcing tech
services “to be more current and nimble” and “reduce costs when
possible,” it said in a statement.
Among 350 tech workers laid off in 2013 after a merger at Northeast
Utilities, an East Coast power company, many had trained H-1B immigrants
to do their jobs, several of those workers reported confidentially to
lawmakers. They said that as part of their severance packages, they had
to sign agreements not to criticize the company publicly.
In Orlando, Disney executives said the reorganization resulting in the
layoffs was meant to allow technology operations to focus on producing
more innovations. They said that over all, the company had a net gain of
70 tech jobs.
“Disney has created almost 30,000 new jobs in the U.S. over the past
decade,” said Kim Prunty, a Disney spokeswoman, adding that the company
expected its contractors to comply with all immigration laws.
The tech workers laid off were a tiny fraction of Disney’s “cast
members,” as the entertainment conglomerate calls its theme park
workers, who number 74,000 in the Orlando area. Employees who lost jobs
were allowed a three-month transition with résumé coaching to help them
seek other positions in the company, Disney executives said. Of those
laid off, 120 took new jobs at Disney, and about 40 retired or left the
company before the end of the transition period, while about 90 did not
find new Disney jobs, executives said.
Living in a company town, former Disney workers were reluctant to be
identified, saying they feared they could jeopardize their chances of
finding new jobs with the few other local tech employers. Several
workers agreed to interviews, but only on the condition of anonymity.
They said only a handful of those laid off were moved directly by Disney
to other company jobs. The rest were left to compete for positions
through Disney job websites. Despite the company’s figures, few people
they knew had been hired, they said, and then often at a lower pay
level. No one was offered retraining, they said. One former worker, a
57-year-old man with more than 10 years at Disney, displayed a list of
18 jobs in the company he had applied for. He had not had more than an
initial conversation on any one, he said.
Disney “made the difficult decision to eliminate certain positions,
including yours,” as a result of “the transition of your work to a
managed service provider,” said a contract presented to employees on the
day the layoffs were announced. It offered a “stay bonus” of 10 percent
of severance pay if they remained for 90 days. But the bonus was
contingent on “the continued satisfactory performance of your job
duties.” For many, that involved training a replacement. Young
immigrants from India took the seats at their computer stations.
“The first 30 days was all capturing what I did,” said the American in
his 40s, who worked 10 years at Disney. “The next 30 days, they worked
side by side with me, and the last 30 days, they took over my job
completely.” To receive his severance bonus, he said, “I had to make
sure they were doing my job correctly.”
In late November, this former employee received his annual performance
review, which he provided to The New York Times. His supervisor, who was
not aware the man was scheduled for layoff, wrote that because of his
superior skills and “outstanding” work, he had saved the company
thousands of dollars. The supervisor added that he was looking forward
to another highly productive year of having the employee on the team.
The employee got a raise. His severance pay had to be recalculated to
include it.
The former Disney employee who is 57 worked in project management and
software development. His résumé lists a top-level skill certification
and command of seven operating systems, 15 program languages and more
than two dozen other applications and media.
“I was forced into early retirement,” he said. The timing was
“horrible,” he said, because his wife recently had a medical emergency
with expensive bills. Shut out of Disney, he is looking for a new job
elsewhere.
Former employees said many immigrants who arrived were younger
technicians with limited data skills who did not speak English fluently
and had to be instructed in the basics of the work.
HCL America, a branch of a global company based in Noida, India, won a
contract with Disney in 2012. In a statement, the company said details
of the agreement were confidential. “As a company, we work very closely
with the U.S. Department of Labor and strictly adhere to all visa
guidelines and requirements to be complied with,” it said.
The chairman of the Walt Disney Company, Robert A. Iger, is a
co-chairman with Michael R. Bloomberg, the former mayor of New York, and
Rupert Murdoch, the executive chairman of News Corporation, in the
Partnership for a New American Economy, which pushes for an overhaul of
immigration laws, including an increase in H-1B visas.
But Disney directly employs fewer than 10 H-1B workers, executives said,
and has not been prominent in visa lobbying. Mr. Iger supports the
partnership’s broader goals, including increased border security and a
pathway to legal status for immigrants here illegally, officials of the
organization said.
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