Disney fires 250 tech workers and replaces them with H1B workers

http://www.nytimes.com/2015/06/04/us/last-task-after-layoff-at-disney-train-foreign-replacements.html?smid=fb-nytimes&smtyp=cur&_r=0

by pm24601 • 11 years ago

20 20 11 years ago

nytimes.com

pm246012• 11 years ago

Thus creating 1000+ more Americans uninterested in fixing the immigration system

paulhauggis• 11 years ago

The parallels with the music industry are very interesting: The music industries decided to fight file sharers with government intervention (just like what many want to do with businesses now with H1B workers). File sharers just figured out new ways of getting music for free and now we have things like Bittorrent and the Piratebay.

The music industry was forced to complete and yes, they make less money, but at least they can make a living. The same can be said of American workers wanting to compete with overseas workers: Figure out how to compete or you will be crushed due to the now global marketplace.

pm246012• 11 years ago

Exactly what did this workers do wrong? As was noted in the article, a number of them did such a good job that they were expecting a raise.

“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.

geoelectric2• 11 years ago

I don't think this is an issue of competing with overseas workers, per se. American companies like H1Bs for two reasons:

One, they're generally paid less. I think this is usually justified by the employers because of the up front legal costs around the sponsorship, but those costs amortize over time since the salary stays lower each year.

Two, they're locked into the job. It's not trivial to get a new sponsor; you can't just randomly job hunt. So when things get bad, the sponsored employees stay when the standard ones leave.

And regardless of thoughts around global markets and whatnot, H1Bs are supposed to come with a simple rule: there is no available domestic resource to do the same job. At the point where you have the prior workers training the new workers, that's plainly being violated. It's not supposed to be "nobody to do the job at the sub-market price you're willing to pay."

I'm all for global marketplaces, but this isn't really that. This is importing artificially cheap labor into a domestic marketplace. That's a bit more questionable.

seldonPlan• 11 years ago

This article has already been mentioned on HN https://news.ycombinator.com/item?id=9653389

I feel the article doesn't really capture the whole story... https://news.ycombinator.com/item?id=9653389#9660767

chojeen• 11 years ago

My dad owns a mid-size landscaping company in a medium-sized city in the Midwest. Until the Great Recession hit, he'd hire around a hundred of laborers from Mexico and Latin America on H2-A visas every year. He could only do so after proving that they could not hire enough Americans at a reasonable wage (obviously, the meaning of "reasonable" is hotly debated, but at the time, it meant slightly higher than minimum wage). I've never understood why similar restrictions aren't put on H1-B visas.

Kalium• 11 years ago

In theory, there are similar restrictions. In practice, there's a whole micro-industry to help you get around them.

dudul3• 11 years ago

"they could not hire enough Americans at a reasonable wage (obviously, the meaning of "reasonable" is hotly debated, but at the time, it meant slightly higher than minimum wage)"

So as long as you're trying to get more than minimum wage you are being unreasonable? Even though your skills are in high demand/short supply?

This is basically a way to say "You Americans who have valuable knowledge/skills, do you really think we're gonna let you take advantage of demand and supply to make more money out of them? F-you, we're gonna pass some laws to allow us to import people from 3rd world countries to replace you".

I'd like to see these companies' reactions if we did the same with imported goods and abolished all taxations for products manufactured outside of the country.

cmdrfred• 11 years ago

They would love that. They don't care if it was 'made in America' they just want to sell it here.

geoelectric2• 11 years ago

Those restrictions are in place, to the point that there are requirements for advertising the job for a certain time, etc.

One of the classic ways to get around that one was quietly advertising the job on a company bulletin board or in a low-readership classified section, or something like that.

Not sure if that loophole ever got fixed, but basically, companies game the system.

bduerst2• 11 years ago

Did Disney actually replace their 250 workers with H1B immigrants?

The article seems to be juggling words a bit to make a case against immigration, but later states that Disney only direct employs 10 H1B workers. I presume the agency that is now doing the data center work at Disney is all H1B immigrants, but the article doesn't address that either.

Considering that only 85,000 H1B visas/yr are granted and there are 154,000,000 workers, is this (0.05% of the workforce) really as much of a problem as the article is making it out to be?

pav7en3• 11 years ago

No, these 250 H1Bs are not direct petitions filed on behalf of Disney. That would've been great for Florida and the Federal govt.

What these companies do is insidious. Say, you're working for HCL in India, HCL files a H1B for you and sends you over for 6 months to the US and then you come back to India and hand over your H1B to them. Not very clear on the specifics, as I've only heard about it.

So during the time you're in the US, you don't get paid US wages for a H1B s/w engineer, which are pretty good. What you get is a stipend for those 6 months and your regular Indian salary which at the very max for the very best won't be more than $40,000 in conversion.

So these are significant savings for Disney and significant profits for HCL.

pav7en3• 11 years ago

In short these are not real H1Bs. But a glaring example of how the system is being gamed.

And also stigmatising legitimate H1Bs in the country and the American product (mostly) companies which champion their cause.

bduerst2• 11 years ago

This is wrong on several levels...

- H1B visas require that you list prevailing wage and that it's higher than the average pay for U.S. citizens in the same region. It can be manipulated to a degree, but not at scale (1000s) for a single employer.

- H1B visas are for a minimum of 3 years, not six months, during which the immigrant is forced to live and work in the U.S. (not India), thus spending and paying taxes in U.S.

This is exactly my point that I was getting at about the article - it's creating FUD about H1B immigrants and using Disney's terrible corporate policy to contribute to rumors like the ones you just said. If anything, the H1B program needs more funding for enforcement with employers, but stories like this make it seem like the program itself is the culprit.

dpweb• 11 years ago

The 85k H1B figure is misleading. Disney doesn't employ these people, they outsource to HCL. HCL hires Indian workers. Who's to say they need H1Bs for these people at all. Also, for every Indian tech team lead in the US, they often hand the work off to a team of ten people back in India who don't need H1Bs at all. The average Indian programming wage I believe is about $3-4 hr.

The question is US companies outsourcing to companies with a primarily foreign workforce, and displacing US jobs. There have been estimates that outsourcing has caused the loss of 1.5-2 million US jobs since 2000. There's several considerations involved including the need to have skilled tech workers in the US, but its certainly a serious societal issue in the US.

pav7en3• 11 years ago

So why can't lawmakers agree on preventing these consulting companies from applying for H1bs?

Corruption all the way through:

US Congress/Senate: "oh wait India is going to buy defence h/w worth $47B, we got to get in on the action"

Indian consulting companies: "dear Indian politician, we get a lot of money through Forex/labor arbitrage, let us help you get rich. In return protecting us from the fallout of these pesky articles is a national interest and oh hey how about getting us another 2000 acres of land out there."

Indian politicians and babus to US counterparts: "yep you can sell us your mil. h/w, but first let your contractors bribe us and then let our IT companies bribe you"

Pretty simplistic and only focuses on the corruption angle, while there are definitely other issues as well, but does bring up why the US can't just say "hey no visas for you".

This kind of a system is more damaging to India than the US at the macro level. Since it makes Indian companies and people who work for them incapable of doing something original and working on really hard problems in our backyard.

The attitude which it engenders is "oh hey, we can always stay in business by selling ourselves cheap and replacing Americans." This party will sooner or later come to an end. At which point hopefully a lot of such Indian companies will go extinct and only the best will survive.

At the personal level, the Americans who got fired are going to be more resilient and will come out on top of the situation, however great their pain may be in the moment.

Oh, one more thing, this is not the only threat faced by employment in the US, there's automation too.

So, hatred of something, say Indian consulting companies, or people employed by them, immigrants in general, against robots or automated systems is no solution. I say this since this is the most knee-jerk reaction.

The only way anyone hope to cope with this is by not expecting it to get any easy. Not expecting ease or having a sense of entitlement. But by being open to learning, growth, reinvention and hope.

http://www.business-standard.com/article/economy-policy/indi...

bunnymancer• 11 years ago

Adding to this, while one might look at H1B visas and go "That seems like quite a bit of work per employee, so it can't be that bad"

Don't worry, larger companies can make blanket petitions for large number of employees.

These are paid less than the people around them and will be sent back to their home country if they're fired and can't find a new sponsor within a few months.

That and add to it that most of these larger companies are conveniently located in ""right to work"" states means exactly what we don't want to say.

Indentured servitude.

dudul3• 11 years ago

In theory, an H1B who is let go has 24 hours to leave the country. The 30-day grace period is a myth. It is just a "de-facto" grace period since to file a new petition one needs their last pay statement (and if the pay statement is older than 30 days the USCIS will know that one is no longer working there).

Disney fires 250 tech workers and replaces them with H1B workers

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