“Last Task After Layoff at Disney: Train Foreign Replacements” (NYT, June 3, 2015) is an article about Disney getting rid of a bunch of older unwanted IT workers in favor of young immigrants from India. The journalist, interviewees, and reader comments express shock at Disney’s lack of sensitivity in making the displaced Americans train their Indian replacements:
“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.”
One former worker, a 57-year-old man with more than 10 years at Disney, displayed a list of 18 jobs within the company he had applied for. He had not had more than an initial conversation on any one, he said.
“The first 30 days was all capturing what I did,” said the American in his 40s, who worked 10 years in his Disney job. “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.”
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.
This will perhaps not be one of the references cited next time Barack Obama or another politician advises young Americans to pursue STEM careers.
I’m not shocked at Disney’s quest to cut costs. I am shocked, however, that it was humans who came over here rather than data going over there. If the job was to sit at a computer connected to a network, why wouldn’t Disney let the Indians stay in India and invest in a fat network pipe rather than investing, indirectly through a contractor, in all of the H1-B legal work? Is it concerns over data security?
What about the age discrimination angle? Is it okay to fire all of your workers in their 40s and 50s and replace them with people aged 20-35? If the answer is “no” then is it okay to fire a large group of workers, most of whom happen to be age 45-60 and replace them with a contractor who will supply on-site workers, most of whom happen to be 20-35?
[One of my pet theories is that a lot of the reason it makes sense for an American company to move an operation over to India or China is that the result is a young workforce for that operation.]
Related:
Information is power and it seems that Disney’s managers want to remain in control, which is much harder when IT is offshored 100%. In large bureaucratic inefficient organizations with no local IT disconnect with offshore teams is quite common as well as physical and timezone communications issues with remote offices. Such companies stock prices suffers and unhappy remaining few employees looking to leave (them remaining there means that they are skilled and cheap relatively to value they create). Something tells me that Disney ran into problems in second week of month 4 past training and they can not take training bonus back because this sham will not stand in any court of law. Since IT is not critical to their business Disney is OK. If largest shareholders could they would just discontinue their IT operations except payroll, fraud control and back office operation (email, chat etc..) and would outsource all remaining critical operations.
I obviously don’t know the details of this particular contract, but there are probably offshore workers as part of the plan, probably with a 1 to 5 or 1 to 10 ratio.
Time difference and the value of face to face instead of long threads of email that don’t go anywhere, being able to attend all the meetings, etc… means that it is preferable to have people on-site doing the communication and preparing work for teams offshore.
There are probably ratio closer to 1 to 1 or 1 to 3 maximum unless of course Disney has large offshore regular non-it business. Leaving local IT liaisons only for communication and work assignment makes them overworked figureheads in short amount of time ans enterprise suffers (if it needs IT for business in the first place). I do not know this particular situation either but have anecdotal evidence from friends who converted from being highly skilled developers to being such liaisons with 90% of local IT gone. Company stock has been in the dog house for years and business is barely afloat staying alive on old clients of it products that need support and modifications. Friends looking to leave… Similar from one of my old workplaces, although they retained significant US present their marketable people left because their business had mainstream and not shelf market.
This scenario (training foreign replacements) has happened to me multiple times.
Usually, it is a two-pronged strategy — a team of H-1B workers along with a larger team offshore. Though, some organizations (American Express) used so many H-1B workers that the bodyshop (Syntel, Tata, etc.) procured a leased facility for all the workers.
This isn’t anything new — it’s been going on for ~20 years now. I can remember at least a half-dozen times, meetings where the above scenario played out, and crushed employees (or contractors) after being informed of the company strategy.
Is it entirely accurate to describe the H1B workers as young immigrants? Disney isn’t hiring young people who immigrated to the US, gained a green card or US passport, and are now looking for work. Instead, Disney and the US government are bestowing “temporary” US residency on foreign nationals through a (dual-intent) work visa ostensibly intended to remedy severe shortages in high tech and other fields in the US.
“Immigrant” certainly isn’t an inaccurate word to describe H1B workers, who typically wish to stay and who seek green card sponsorship from their employers, but there clearly is an ambiguity in exactly what “immigrant” means here. My guess is that immigrants who are citizens or permanent residents and can freely participate in the labor market are just as unappealing to Disney as those citizens who were born in the US.
Of course, it goes both ways. Just like citizens born in the US, immigrants whose employment options are not restricted by the terms of their visa may rationally choose instead to earn an equivalent or greater salary as a dental hygienist or registered nurse, and avoid the age discrimination and “knowledge transfer” layoffs when they become middle aged or old.
Severance should not be contingent on training your own replacement. I believe this because of two reasons:
A.) Training your own replacement is almost certainly not in the job description and is beyond what most people would consider a reasonable request from your employer.
B.) Regardless of whether you decide to help the company train your replacement they’ve chosen to lay you off NOT to fire you. And you’re only in this predicament of training your own replacement because they’ve chosen to lay you off. They made that decision when they brought in the Indian IT guys. So severance pay should be guaranteed regardless of whether or not you tell them to go fuck themselves.
@Naum: Though, some organizations (American Express) used so many H-1B workers…
I once had a telephonic job interview for an IT position with AmEx. The AmEx interviewer was a mostly unintelligible, bored & uninterested Asian female. Though well-qualified, I didn’t get a job offer.
Disney is party to the notion the worldwide middle class has to go away.
They are globalists, not American. In their mindset, it is not enough to dissolve the middle class by outsourcing jobs, they also have to do a happy dance on their demise.
Barron’s cover story last week concerned how well-positioned Disney is. Assuming they’re correct, these displaced workers could hedge their position by going long Disney. Also, if these folks have any machine learning/data science experience, I’ve seen that Hilary’s campaign machine is hiring. This might be doubly-beneficial; supposedly she represents the ‘common man’.
I’m in the IT field too, so I empathize. Many days I rue the decision not to go to law school, or run for office, or be a public-sector employee; although I think the latter group’s run is over once trash stops being collected because pensions need to be paid.
I’m sure Disney found some loophole but I don’t understand how this is legal. H1B’s are supposed to be issued when no American worker is available to do the job. Firing your workforce and directly replacing them with H1Bs is totally against the spirit of the law. I think the loophole is that the replacement workers don’t work for Disney, they work for an outsourcing firm. But maybe we need to close this loophole legislatively.
Unions have (justly) gained a terrible reputation but they were created because of abuses like this. It’s amazing that American workers now meekly accept this kind of treatment. If the workforce had collectively told Disney to go to hell – that they were not going to train their own replacements, then they could have at least thrown sand in the gears of this inhuman scheme. I only pray that the people who thought up this plan have their own jobs “outsourced” someday soon.
A different side of the story is that Disney’s IT initiatives have been long delayed (years late) and budget busting. They literally spent billions of dollars and the systems are buggy and barely performing adequately.
I don’t disagree with the premise that dumping US employees for cheaper foreign labor is a bit sleazy, but I doubt they’d be doing it if their projects were performing well.
The premise behind having on-site training for replacements is that often business processes are not documented properly, and so the only way to ensure there is no disruption is to have the replacement shadow, then take over.
Note the article does not say the Indian employees are on H1-B visas, all mentions of H1 are from the NYT mentioning cases like these are used by opponents of the H1-B program to question its continuation. Almost certainly doing that would violate the Department of Labor certification that is part of the H1-B application process, and the company would expose itself to significant liability. More likely, the new workers are on L1 visas, come for the training and knowledge transfer, then return to India. It’s conceivable they work for an outsourcing firm that is staffed mostly by H1-B employees, but Disney would not realize significant enough cost savings from US-based employees to make a risky migration worthwhile (H1-B holders are supposed to be paid the same wage as their US equivalents).
I have trained offshore developers in existing applications and performance tuning as part of supporting large overseas business that used US location as offshore developers. Remote location was one of technological and financial centers with higher costs of leaving higher than on US Atlantic coast. No visas or physical presence were ever necessary, phone, email, chart, remote PC and desktop sharing were sufficient for training when both trainer and trainee were interested in final result. Day to day support of remote location and communicating with remote business people is very different and much harder, business people were rotating among global offices and tried to maintain personal connections with IT. It worked for application that had recovery features built-in and required little support but for run off the mill IT applications it was not sufficient.
From the article—“This will perhaps not be one of the references cited next time Barack Obama or another politician advises young Americans to pursue STEM careers.”
Ha. Having been trained as an engineer, and working in software since about 1988, I would not recommend IT as a career choice for young people. It’s too hard to stay employed at higher rates as you get older, as employers are not willing to pay for the higher skill and experience of older workers. Add the stiff competition from foreign workers, either onshore or offshore, and it’s not a great choice if you have other options.
Hollywood studios are rather old-fashioned and many of them have policies that data related to movie production must be kept within the physical walls of the facility. (nevermind that a solid cloud-based system is likely more secure than whatever custom on-premises system they come up with).