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

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?

[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?

[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: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

[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: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.

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?

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: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.