Disney IT Workers Prepare To Sue Over Foreign Replacements (computerworld.com)

JustAnotherOldGuy writes: At least 23 former Disney IT workers have filed complaints with the federal Equal Employment Opportunity Commission (EEOC) over the loss of their jobs to foreign replacements. This federal filing is a first step to filing a lawsuit alleging discrimination. These employees are arguing that they are victims of national origin discrimination, a complaint increasingly raised by U.S. workers who have lost their jobs to foreign workers on H-1B and other temporary visas. Disney's layoff last January followed agreements with IT services contractors that use foreign labor, mostly from India. Some former Disney workers have begun to go public (video) over the displacement process

Comments

Sue / fine the IT services contractors

[Joe_Dragon]

They are the ones who are abusing the H-1B system. Disney is just subbing the work out.

Re:Sue / fine the IT services contractors

[MickyTheIdiot]

It's a little bit of a moot argument when the federal government isn't really interested in enforcing the H1-B visa law no matter WHO you believe is actually breaking it.

Re:Sue / fine the IT services contractors

[NotDrWho]

The H1B visa shuffle has become an almost ritualistic dance at this point:

Congress: May we have this backdoor into your software, for 'merica security and shit?
Silicon Valley: Sure, may we have more H1B visas to drive down wages?
Congress: Sure!

Re:Sue / fine the IT services contractors

[Scutter]

You really think Disney is an innocent bystander? That they don't have full knowledge of what they're doing?

Re:Sue / fine the IT services contractors

[tompaulco]

It's a little bit of a moot argument when the federal government isn't really interested in enforcing the H1-B visa law no matter WHO you believe is actually breaking it.

It's too difficult to enforce and the 99% of abusers are making the other 1% look bad. So just shut it down. If you can't police it and you can't control it, then you can certainly shut it down. Then we will see the companies who REALLY can't find the talent they need in America and they will be willing to pay through the nose to get it. That is what is supposed to happen with a "shortage" of talent, prices go up. Not down.

Re:Sue / fine the IT services contractors

[WindBourne]

And that is exactly why these disney ppl need to sue not just disney, but immigration. They have a responsibility to ENFORCE the WORDING AND MEANING of the law. They have not been, and continue to not, do so.
As such, I believe that upon disney ppl winning this lawsuit, that if they go after the feds, it will open a huge pipeline of lawsuits against the old companies, immigration, and maybe even companies like tata. Of course, the Indian companies will simply declare bankruptcy, but it will be no different than companies that put in place asbestos, and other items now considered danagerous.

Why would Disney do this?

[DirkDaring]

THE WALT DISNEY COMPANY REPORTS FOURTH QUARTER AND FULL YEAR EARNINGS FOR FISCAL 2015
  Revenues for the year increased 7% to a record $52.5 billion.
  Net income for the year increased 12% to a record $8.4 billion.
  EPS for the year increased 15% to a record $4.90.

So why try to save a few bucks outsourcing? I don't get it, the money saved is literally insignificant to them.

Re:Why would Disney do this?

[Anonymous Coward]

The current corporate belief is that they have no duty or obligation to their employees. None at all. Their constant party line is that they do this for their stockholders, but that seems like a very weak argument these days.

I think mostly this is about selfishness on the boardroom and the CEO levels. It's that simple.

Someone is going to go back to the stockholder argument here I am sure, but the main stockholders are actually people at the boardroom and CEO levels so even that, to some extent, is selfishness.

Re:Why would Disney do this?

[sociocapitalist]

So why try to save a few bucks outsourcing? I don't get it, the money saved is literally insignificant to them.

Because the sole reason for corporations to exist is to maximize profits for the owners. There is no such thing as 'insignificant' when it comes to profit and greed.

Re:Why would Disney do this?

[Anonymous Coward]

It's an excuse for greed. Greed is fashionable amongst the elite.

Re:Why would Disney do this?

[MickyTheIdiot]

This makes corporate-centric people on stashdot explode every time I say it, but the corporation is (at least supposed to be) a creature of the state. One of the reason that corporations act the way they do is because of case law. The legislature can change the law which will contradict that case law.

The parent of this post doesn't do this, but a lot of people like to pretend that somehow the idea of "maximizing profits" comes down from God. It doesn't. It's the outcome of years of evolution and with national law. It is changeable if the political will is there.

Having said that, the political will is not there because all intents and purposes the corporate class control the government.

Re:Why would Disney do this?

[MickyTheIdiot]

Is it a desirable quality for the success of a society, however?

There isn't a requirement for a government to kowtow to every "need" a business puts forth. Multinationals aren't paying taxes and, as this story shows, they aren't really providing that many new American jobs either.

Re:Why would Disney do this?

[DNS-and-BIND]

Business schools in the last 20 years have really been a disaster. It's the progressive idea that things should always be improving. They teach the role of a businessman isn't to create value, it is to maximize value. A staid old company with the same employees for 30 years and a steady profit? Out the window! This maximizing progressive attitude goes towards everything, all the way down until they finally get around to skimping on toilet paper.

Re:Why would Disney do this?

[Anonymous Coward]

The habits of the consumer is what justifies the abuse. Stop the consumption and the abuse will ebb.
 
But you'll be in line with the new Star Wars film, right?

Re:Why would Disney do this?

[Zontar_Thing_From_Ve]

So why try to save a few bucks outsourcing? I don't get it, the money saved is literally insignificant to them.

I can suggest some reasons why.
1) Disney's primary business is not IT related. We'll just say it's "other stuff". Sure, there is an IT component, but it's not the primary reason the company exists. I work for a Fortune 500 company who's entire business is IT. We're out of business or darn close to it without our IT component. My company actually treats its US based IT workers pretty well and while we do hire H1B people and do some outsourcing of work to India, neither is what I would call a primary chunk of our business. My experience as a career IT worker is that a lot of companies don't really value IT work at all and they always look at it as something anybody can do and it can be as well for cheap by using foreigners. So I think that Disney has never really valued their IT work very much and they look at it as costing too much because they have a bunch of benefit sucking Americans doing it.
2) The workers were all in Orlando if I remember correctly and I'll just simply say that Disney has always treated its Orlando employees as being superfluous. IT employees in California may at this time be under no danger at all, so there is some component of it being in Florida because they are far away from where the big shots are in California who made this decision.
3) Nobody at Disney wants to admit this, but ESPN's revenues are going down. To keep or get sports content, ESPN (which Disney owns) had to pay astronomical prices. In order to keep gouging the TV providers and charge them for carrying ESPN and its related channels, Disney had to agree to lower the number of customers who get their channels to keep the price they get per customer the same. This agreement shocked many industry watchers as they thought Disney would never agree to this. So the reality is that ESPN is going to be spending more and bringing home less. Shaving dollars off IT costs is one way to deal with that reality. Maybe it's a stupid way but again, many or most businesses don't value IT work, so to them it's an easy thing to cut. And note that ESPN recently had some fairly brutal job cuts related to this.

Re:Why would Disney do this?

[Ol Olsoc]

Note, of course, that the "owners" are anyone who owns Disney stock. Which includes a large chunk of the 401k's and IRA's in the country. Certainly it includes mine...

What do you think of the long-term implications of this however?

The goal, such as it is is to continually maximize profit in all areas. This means a large portion of expenses are the labor costs.

So it only stands to reason that you want expenses as low as possible - American workers tend to be paid more than someone from a country with a much lower standard of living, therefore - American workers are an expense to be eliminated.

This makes perfect sense for a extremely short term outlook.

But from a long term outlook, it is deadly counter-productive to your interests.

How often is that person from the third world country going to fly his family over to Disney World, pay the 100 dollars a person entrance, the hotels and meals for the time, then fly them all back home?

Oh, that's right - he's not.

Then again, since the incidental end goal for Corporate America is to force most of it's citizens to be either unemployed, or to work for the wages that they can pay someone in a third world country - eventually, the Americans who used to go to DisneyWorld, or DisneyLand or Epcot, or stay at the multiple resorts or cruises, are not going to have the money.

And of all of the businesses that should know that their continued profitability comes from a healthy middle class, Disney should have that on the first sentence of their mission statement.

They rely on a lot of people, spending a fair amount of discretionary money to visit their venues. How much do you figure a third world America that saves the shareholders a lot of money on labor is going to spend on 100 percent discretionary things like a trip to Disneysomething, when we're all making the same wages as that guy in IndiaStan?

It's like saving money on skydiving by not spending money on that expensive parachute.

Re:Why would Disney do this?

[Slashdot Junky]

That often is my gripe. Too many companies and executives aren't satisfied with making a reasonable profit and keeping good people employed. Instead, they want to pursue unreasonable profit and goals with a shortsighted mindset and no concern for how such a business strategy is to affect their employees and society as a whole.

We all can't profit. One's gain is only made possible by another's loss.

Re:Why would Disney do this?

[spire3661]

"Rationally speaking, there is no reason to pay more for something than you have to. If I can get someone from (or in) India to do something about 80% as well for 50% of the cost of an American worker, then why wouldn't I do it? The only reason not to is a moral argument; there's no financial reason to do it unless doing it results in a boycott of my company and products (it never does). And when you're a financial institution, that's what you follow."

This amoral bullshit only works when you forget that companies are supposed to be SYMBIOTIC with their communities. ITs not rational to promote a 'profit only' mentality, in the end it destroys the nation. We need to get back to the idea that workers and the business are one, and live and die together. You are dressing up sociopathy as business and calling it good. Companies are superposed to have a DUTY to their workers and community and you dont understand this AT ALL.

Re:Why would Disney do this?

[swb]

You've never been to Disneyworld, have you?

The entire fucking place is one giant network, down to the RF wristbands ("magicbands") used by guests to do everything from unlocking their rooms, paying tabs everywhere throughout the entire resort, getting on rides, entering the parks, everything.

And let's not forget that pretty much every ride and attraction runs or is directly dependent on computers. It's like Steam, but connected to animatronics.

Disneyworld is the most IT-driven place I've ever been to.

Re:Why would Disney do this?

[thinkwaitfast]

Most companies are corporations. It cost me $35 to start my own corporation a few years ago and have started a few since then. When you start a corporation, you fill out a couple pages of forms, pay the license fee, send it in and the state (corporations are all at state, not national level) sends you back a license that you have to have displayed at the place of business and a million shares. There are at least 2 officers, president, vp, treasurer and secretary. One officer may hold more than one position, eg, vp and treasurer). The people decide among themselves how to split the shares. One share is one millionth of the company. Secretary records who owns the shares. Filling for a tax id # is separate from the corporation.

Each state has different requirements on what you have to do, obligations of the corporation, yearly fees (if any) that you have to pay. You can do whatever you want with the shares and can be distributed to up to 50 people. Eg, you could hire someone and in addition to their salary, you could also 'pay' them 10 shares per hour of work. But those shares have to come out of the original pool. Say you were president and got 500k shares to start (the business was your idea after all and you invented the widget that's now making the company $100k/year), so you get the largest number of shares. So after a year you've paid Bob $50k in cash and 20k shares of the company. You are 50k richer, but down to 480k shares of the company.

Re:Why would Disney do this?

[macs4all]

Capitalism is basically the systematic harnessing of greed for social good. It has some flaws, but it's less bad than anything else we've tried.

And what else have we tried in the U.S.?

Re:Why would Disney do this?

[Ol Olsoc]

from a country with a much lower standard of living

Does this raise or lower the standard of living in those places?`

What happens is that the standard of living tends upward in the power country, and lover in the country with a higher standard of living.

But all is not well. As SOL's creep up, people tend to want more. More pay, more time off. Stuff like that.

Since the company has to make more profit this quarter, they will try to source work to another, lower paid country.

The end result will be somewhat leveling of the playing field, but countries like America will be tending closer to the third world countries .

Re:Um, no

[Anonymous Coward]

If that's the case then Disney should have offered US workers to keep their jobs by accepting a 75% salary reduction. Disney didn't bother to make that offer, so their criterion must be nationality and not pay.

Its About Time

[wisnoskij]

Technically anytime a company hires an H1B1, and you believe you have the qualifications for that job, you can raise hell. Hell, maybe you could even sue for lost wages. Because that is not supposed to happen. Period. To actually get fired over a H1B1 is completely ridiculous, and in this case the company has no recourse to saying that they looked for qualified professionals in America, but could not find one. The case is cut and dry, the company brazenly lied to the government, and the government rubber stamped the H1B1, like always. Like how Google, et al, got a non-competitive business practice suit brought against them for agreeing to not snipe each others employees. Americans need to come together and launch a major lawsuit against H1B1 users and their government lackeys.

Re:Its About Time

[edtice1559]

Except that we really don't have this option because the behavior is so pervasive. There's not a single thing that you can buy or do without giving money to a business that acts in ways that are ethically questionable at best. Let's say you whip a group into a frenzy and they all decide to go to a different theme park. Tomorrow we'll find an issues with those places. I support voting with your wallet on the most egregious issues, but it can't be a universal solution. We need government that functions.

OCP owns the police

[Anonymous Coward]

Does it bother anyone else that these laid off employees gave an interview to Disney owned ABC? The news story really spun the story towards how STEM degrees are worthless rather than suggest any regulations on outsourcing jobs.

Re:What are you doing about the abuse?

[Anonymous Coward]

the false premise here is that any of the actions mentioned will make a difference.

Re:What are you doing about the abuse?

[kilfarsnar]

By the way, I own stock, but it doesn't mean I am for every type of corporate abuse that makes the company a few extra bucks.

So as a shareholder what are you doing about it? Are you attending shareholder meetings? Are you putting forth proposals? Are you voting on the board of directors? Are you doing these things even if they are unlikely to make much difference?

Just so we're clear I agree with you, but if you are a shareholder and you say nothing then the blood is on your hands too. If you own stock then you are an owner of the company and you are tacitly condoning any actions you don't speak out against.

Not all shares are voting shares. What you suggest just isn't realistic for shares owned through mutual funds and the like.

Re:No union needed

[Sique]

That is akin to "the law already protects the innocent citizen, no need for a lawyer to dip his beak into the citizen's money bag."

A law is just some sheet of paper, you need people to actually enforce it.

Re:I'm Going To Sue Disney

[Anonymous Coward]

The fact that the federal government hasn't gotten in on a textbook case of H1-B abuse shows what a scam H1-B usage is. It's bad for the guest worker and bad for the replaced worker. It needs to be based upon the skills of the individual H1-B holder. If they are good enough to do the job here, they should be good enough to have an H1-B in their own name, not be beholden to a company sponsoring them. If H1-B workers are truly a valuable commodity, then we want them here *regardless* of where they are working because their skills cannot be replaced. Stop indentured servitude replacement of American workers. Encourage immigrants who bring much needed skills.

It's the IT service providers that need fixing

[ErichTheRed]

I've been working in IT for 20 years now and have been through a couple of these outsourcing/offshoring exercises. The truth is this - there is no way to convince executives that IT is a strategic investment opportunity unless the company's only business is IT. Therefore, outsourcing will happen in most big companies the first time the MBA's spreadsheets show a big enough paper cost savings. And in Disney's case, it's not the money -- I have 2 little kids. Disney could fill several of Scrooge McDuck's money bins with just the daily cash flow from their parks. They must carry all the cash out of Disney World in dump trucks. So, there's proof that they're not doing it for cost savings.

The thing that needs to be attacked is the IT service providers' use of H-1B and offshore labor for inappropriate tasks. Go after Cognizant, Tata Consulting Services, Accenture, IBM, HP, Infosys, Tech Mahindra, Xerox, etc. for bringing in H-1B labor for purposes that don't meet the original intention of the program. H-1B was designed to import specific high-end skill sets for a limited time to fill in actual gaps in education/experience. These service companies use the H-1B to bring in "job shadowers" who train the offshore teams, and low-level DBAs, developers and other roles that could easily be had locally without the communications or quality issues. The problem is that this will never get popular support until the vast majority of white collar workers are out of a job or underemployed. IT is still seen as a hot field, and we are all still considered well paid, so we don't get any political attention.

Do I think outsourcing is a good idea? No, I think companies need to have some FTEs who at least have a connection to the company. When you go down the service provider route, the provider has to make money at the rate they bill you. The only way they can do this is reduce labor costs and reduce service levels to the absolute minimum to keep you from invoking breach of contract clauses.

I have no idea how it will work out for Disney, but I've worked on both sides of the outsourcing fence. In the company doing the outsourcing, the FTEs left behind are stuck in a stagnant IT department behind a wall of change management process, 2 AM conference calls and incompetent newbie offshore guys that keep rotating. The outsourcing company is forced to cut so many corners that being an on-site employee of the company is not a fun job -- you get to tell people why they can't have things, why projects are late, etc.

Re:No union needed

[Anonymous Coward]

And you sound like the perfect corporate shill. Tell you what, you want to negotiate with me personally rather than a selected representative? Fine, get every single one of your shareholders in a room and I'll negotiate with them. What? "Collective bargaining" is good when it's your side? You get a representative and I don't?

McDonald's menu has become more diverse

[tepples]

Even McDonald's tries to make the workplace at least slightly palatable.

Thats a lie, or the free employee lunch would be sent out for.

Ever wonder why McDonald's menu has become so much more diverse than it was in the days of "Big Mac, McDLT, a Quarter Pounder with some cheese"? It's not only to bring in more business but also so that McDonald's can improve employee lunch without having to send out for it.

Re:McDonald's menu has become more diverse

[Joe_Dragon]

In accordance with Brazilian law, employers have to provide a “healthy and varied” lunch for their workers. This is commonly accomplished through distribution of meal tickets that can be redeemed at restaurants and grocery stores, giving employees the optionof bringing their own lunch or eating out. Last year a state labor court in Pernambuco ordered the company to pay $15 million in damages to employees who were not allowed to bring their own lunch to work and were obligated to eat McDonald’s. In São Paulo a pregnant employee who was ordered by her doctor to stop eating McDonald’s food filed charges when her employer refused to cooperate.

Re:Maybe US IT deserve what they get?

[ErichTheRed]

"US IT workers could change the situation if they wanted to do so. But that would require actually doing something."

I totally agree. The problems with the current situation are:
- The problems are appearing too slowly for people to perceive any wider issue. Everyone assumes that it's just their company making questionable decisions and everything will be made right once they come to their senses. The reality is that this is accelerating and it may be too late to stop the train.
- Most of the people I've ever worked with are very conservative, free-market, Libertarian types -- I'm a pretty big exception among IT peers. Mention anything that might limit a company's power, or involve an organization drive on the labor side, and you'll be labeled a pro-union communist.
- There is also a very strong belief by people in our field that they are the absolute best at what they do, and they would never dare compare themselves with peers, let alone organize alongside them.
- I'm not sure where it comes from, but there also seems to be this belief that if we allow executives to do what they want, then they will let us into their club and we will be rich beyond our wildest dreams. Anything that might limit their ability to amass wealth is seen as jeopardizing that (nonexistent) goal.

Currently, there is very little support for my suggestion -- creating a profession for IT and development, and buying the laws we need. I think it's going to have to get much worse before people get mad enough to fight. And I'm not even talking about a traditional labor union; I'm talking about a professional organization that can lobby alongside the big companies who are fighting for things they want like more H-1Bs and the ability to offshore work more easily.

Re:No union needed

[Anonymous Coward]

Free market? In IT? The existence of the H1-b program proves that is incorrect. The H1-b program is a perfect example of government meddling for the benefit of corporate America at the expense of workers. Compensation has declined significantly since the late 90s and one of the reasons is the H1-b program.

The Middle Class is being decimated because of crony capitalism in the USA.

Lower standard of living.

[Anonymous Coward]

IT compensation has declined significantly since the late 90s.

As a result, I've had to cut back. I don't buy any iThingy or Android thing for that matter. I don't go to movies. I don't have cable because it's too expensive.

My wife and I cook our own meals and we don't go out. And I do my own car and home repair.

My TV is years old and I just have a $30 DVD player I got years ago. My Netflix streaming and over the air TV is my entertainment. Go to the movies? Only if I'm given a gift certificate.

I live worse than my Dad did back in the early 70s when he supported a family of 5, a house and two cars on one engineer's salary. Mom didn't work.

My grandpa supported a family of 7, a house and a car on just a machinist's pay - 50s and 60s.

Try to do that in 2015.

Go to Disney? For an American Middle Class family it's out of reach. It costs a family of 4 thousands of dollars for just a week.

We are spiraling to the bottom and there's plenty of evidence for it.

There are 7.2 billion people with a net increase of about 65 million every year on the World. And unless you're a super model or some extraordinary sports star or entertainer, anyone can be replaced - I don't care how smart you are. Brains are a commodity.

Re:The rising tide of Balassa-Samuelson

[Ol Olsoc]

How often is that person from the third world country going to fly his family over to Disney World, pay the 100 dollars a person entrance, the hotels and meals for the time, then fly them all back home?

Probably not WDW Florida and not immediately. But after companies have started to hire skilled workers in the export sector of a particular country's economy, workers in the export sector will be earning more than the workers in non-export sectors.

Respectfully, at the pace that corporate moves these days, as soon as the wages go up, the shareholders cannot have a reduction in profits, so the company has to find more people to pay as little as possible.

Ak Mexico. As wages went up, those people had to lose their jobs.

A sort of positive outcome of the ADHD jobjumping done by Corporate world is that eventually there won't be any more people to pull that stunt with. It is going to be interesting when the whole world is at one pay level. But will that happen before robots take over.

One of the most amusing things in the world of business is billionaires telling people making minimum wage that they are being paid too much.