"I'm sharing news about it because this experience has taught me the H-1b Visa program needs to change to protect others in the future."
It's surprising to me that Disney was able to replace its local workforce by foreigners via H-1b visas, since I always thought that companies making use of this type of visa were required to prove that they would not be able to find an employee with the required qualifications in the US? Firing an employee to replace him with an H-1b holder seems to completely contradict this requirement.
Also, reading the visa requirements it seems that the company would be forced to pay an H-1b employee a salary which is equivalent to that payed to a "normal" employee performing the same function, so there does not seem to be a huge financial benefit in this either.
I believe the author is simply mistaken that H1-Bs are the problem. H1-Bs are limited enough that they can't be responsible for the volume of outsourcing. They also carry salary parity requirements, and while H1-B holders rarely actually make market salary, the savings still aren't enough to prompt a wave of outsourcing. There was a problem at one time with H1-Bs, but the H1-B lottery has become so competitive that it's not a reliable option for companies to base a business model around anymore. The majority of H1-B recipients these days are foreign nationals who attended American universities, often with masters degrees. Those are the kinds of foreign nationals we want participating in the US economy.
The problem today are the L-1 visas, which are relatively unregulated. L-1 visas are for foreign nationals in a management capacity whose companies wish to transfer them to the US. These visas only require that the employer pay the employee's living expenses, and the employee receives the normal salary they would make in their home country (!).
All of this is fine until you start to stretch the definition of "management". Which many consulting companies (Tata, Infosys, Cognizant, etc) have started to do -- they can take a person from India who is paid ~$25,000/yr (a good engineer's salary in India), fly him to the US on an L-1 visa, and charge him out to the client at $100/hr. An equivalent US-based contractor rate for the same position would be $125/hr and have margins around 10-15%. But the offshoring firms can undercut US-based contractors by 25%, eat all the travel/housing expenses, and STILL make well over 100% margins.
L-1s are actually the problem. There's no salary parity requirement, there's no requirement to look for US-based candidates of equivalent positions, just a requirement that the person is "acting in a management capacity" and has worked for the company for at least 1 year. It's hard to prove that someone is not "acting in a management capacity" -- many of the companies outright lie on the visa applications. What's worse, this type of dishonesty is considered fair game when dealing with corrupt bureaucracies in India or China. But L-1s are fueling the latest wave of offshoring: they allow companies to bring people to the US at offshore prices.
> The majority of H1-B recipients these days are foreign nationals who attended American universities, often with masters degrees. Those are the kinds of foreign nationals we want participating in the US economy.
most smart companies that use the H1-B visa program only hire those with masters degrees. This does 2 things:
- They can first bring them on as "interns" under the F1 visa, which can be extended quite a bit. They are paid peanuts while the firms weed out the absolute duds.
- This avoids the requirements on firms for extra reporting if a certain percentage of their staff are H1-B don't have masters degrees.
This creates a nice little loophole where smaller colleges have massive massive STEM programs with an insane majority being foreign students. The students get their foot in the door to play the game and the colleges get paid.
The CS Masters program is bigger than the CS undergrad program, only 4% of graduating CS undergrads are international, where as 93% of FT CS Masters students are international. That should be odd to anyone.
> This creates a nice little loophole where smaller colleges have massive massive STEM programs with an insane majority being foreign students. The students get their foot in the door to play the game and the colleges get paid.
And these foreign students usually take education loans(around $35k on average) back in their countries. So when they fail to get a job after completing MS degree, they go to the same outsourcing firms and work on F1 visa as contractors for substentially lower salaries again with getting their foot in the door mentality. Outsourcing firms know and exploit the strong tendency of these students to avoid having to go back to their countries where salaries would be insufficient to pay back their student loans fast enough.
Just want to share my perspective as an Indian who was in US for 6 years until I came back to India a couple of months back. I am not sure why you think companies can bring folks from other countries (India in your example) at a meagre salary of $25K per year and that too in a managerial capacity. You are directly questioning the work that folks at USCIS do. I was in US on L1B initially, which is different from L1A that you are referring to, and then converted to H1B and I believe I was paid a fair market wage all along. I know there could be exceptions but don't think this can happen at a scale at which you are projecting. Also, I agree that the definition of management can be stretched but don't think the wage parity can escape the authorities.
It absolutely does happen at the scale I'm describing because part of my job is trying to place guys from India on L-1 visas :) I try to be ethical about it (i.e. only bringing the actual team leaders who are acting at least somewhat in a management capacity) but I see some of my less-ethical competitors abusing the L-1 process to an astonishing degree for grunt-level QA and development resources. Also, you only need to prove the "managerial capacity" thing when the visa is initially issued; they're usually good for a few years and they don't check up on what you're doing after the first time.
And I'm not questioning the work that CIS does; I'm just saying that it's very, very difficult to say someone is not working in a managerial capacity based on false documentation. There's no way they can tell false documentation from real documentation. But for L-1 visas there is no salary parity requirement, only a requirement that the company cover all expenses for the employee while they are in the US. So the IT body shops take advantage of this, and it leads to entire divisions of large companies being laid off and replaced by cheap labor.
This is easily gamed by creating "new" positions with trivially different responsibilities than the old positions you want to get rid of. Now you don't have an established salary history to work with. That's on top of having H1B's by the shorthairs because its so difficult for them to switch jobs, thus the 60+ workweek the domestic workers rightfully balked at is achievable by cost-cutting managers.
That's on top of what Disney did, which was just outsource an entire department to a provider, which side-steps all the paltry protections in the H1B program.
>The majority of H1-B recipients these days are foreign nationals who attended American universities, often with masters degrees. Those are the kinds of foreign nationals we want participating in the US economy.
Frankly, in IT/CS a lot of higher degrees are little more than adult daycare. If you can't figure out how to code via a 4 year degree then another 2 ain't helping you. Even if Disney got MS holders because their workforce needed MS's for some weird reason, which sounds highly questionable to me, some nerds straight out of school aren't going to do a good job running operations with zero professional experience and 10 hours of training from the previous guy. Its clear they did this not for better outcomes but for cost savings.
Its likely an H1B has an undergrad degree for a foreign university that's little more than a diploma mill anyway.
Its hilarious that we bemoan the lack of people, especially women, in STEM, when many STEM jobs can be eliminated with the blessing of the federal government via whats essentially bought and paid-for legislation by large companies looking to cut IT costs. No wonder law school enrollments and finance higher ed degrees have been so high. The smart guys, and women in general apparently, know tech is a ripoff precisely because of shit like H1B's stealing their jobs. Lets stop excusing the H1B program. Its designed to take American jobs from Americans and everyone knows it.
> Its likely an H1B has an undergrad degree for a foreign university that's little more than a diploma mill anyway.
Yeah, this is unfortunately the case. There are only a few internationally reputable universities in India, so if they were unable to get into one of the top schools in the country, they usually have to follow up with a masters from a reputable US university if they ever want to work outside India. I just view someone with an undergrad degree from India and a masters in some technical discipline from a US school as being about the same as someone with an undergrad degree from a US school.
I've seen some firms make org charts that showed that a person on an L-1 visa was "managing" someone when in fact they were an independent contributor.
Yeah, that's what I mean by lie; I've seen these types of documents used in L-1s as well. But at least in India, there's no cultural taboo against lying to someone you don't know to get what you want (the assumption being that they are also lying to stonewall you in exchange for a bribe).
Your problem is opportunity hungry people in developing nations who will do anything for whatever salary offered.
Every thing else is a side effect of this. Do you think cutting down on L1 visas will change anything at all? In an era of communication being super cheap, and means of collaboration getting better and better, you can regulate as much visas as you want, those jobs will continue to be outsourced. The cost benefit is simply too enormous.
All Disney have done from their "you can't prove anything else" point of view is cut costs by finding a cheaper source of local labour through a 3rd party. They have no control over how said 3rd party arranges for the cheaper labour to be made available, or at least no control that can be proven beyond doubt. In fact they probably have no interest at all in how the people get to them - it is none of their business and something to concern the 3rd party only. At least that is my reading of the situation.
Anyone who contracts work to Cognizant knows the composition of the labor-pool. To play ignorant is beyond hilarious, esp. when your CTO is named Tilak Mandadi.
Disney doesn't ask questions about how people are procured. From Disney's perspective, they're just hiring a company to take over technical operations and support. Technology is honestly not Disney's core competency, so it makes sense to outsource to someone who can do the same work with a lower cost base because it IS their core competency.
They just have to sign a contract with Cognizant/Wipro/Infosys/etc that says they will provide managed services covering X, Y and Z products for $X million per year. Managed services contracts allow a contractor to have near complete control over personnel decisions; the client doesn't ask questions about how they can do it so cheap because they have no say in the matter anyway. Managed services contracts are managed against SLAs, so as long as you meet your SLAs, you get paid.
I would somewhat disagree with the thought that technology is not Disney's core competency. Technology is a really, really big deal for Disney and has been for a long time. It is a major part of their day-to-day across the entire company and they are quite competent at it. They didn't hand these tasks over to someone else because they were somehow better at it or Disney's people were incompetent. I simply cannot believe that.
Technology is not their core competency, marketing is. All of their technology would be far less valuable without Mickey, Elsa and Cinderella plastered all over it. Their C-suite may have decided that their technology department was too expensive and the needs of the business could be adequately served by an outside firm.
Quality likely didn't factor in to the decision; so long as it was good enough to not be a roadblock for their marketing teams.
But what are they marketing? It isn't just their characters and movies. Disney is huge and the majority of it heavily relies on technology of many types, including their marketing. I would say they don't have a single core competency, it is a multi-faceted company.
This is the entity that controls Disney entertainment parks. I can see how in-house software engineering is important for some of their entities like Pixar, for Disneyland/Disneyworld it's hardly core competence.
I was drawing up a reply that makes an analogy to home contractors using undocumented labor. (I won't entertain far-below-market bids because those contractors are certainly using undocumented labor.) But, then I realized that I eat in restaurants that most likely use undocumented labor, so I have no moral high ground on this issue. (sigh...)
Moving away from analogy to Disney contracting with an IT firm like Cognizant, just to draw a name from the list you provided. Cognizant is perfectly well documenting the labor, but they are stretching beyond recognition job definitions to get around the "spirit" of the H1B law.
It would be interesting for the US legal system to have an "...in the spirit of..." requirement in determining violation in these matters rather than strictly a "...conforms to the written letter of..." requirement. It might prevent some of this cat-and-mouse bs.
It's the same as any consulting arrangement, common in big companies. My current contracting client has about 20% of their IT staff in house, and the rest is consultants like me. This is done often for accounting reasons: The employee is an expense, accounting-wise. I am paid out of a project, and employed only while the projects is there, so my salary is considered a capital investment. In my specific case, I am far more expensive than their employees, but accounting wise, my expense is far more convenient. I do not work for my contracting client: I work for an intermediate company. How I get paid, what is my visa status... it's all none of their business.
The same thing happens here. No company is laying off Americans to hire H1-Bs. One company hires H1-Bs, another lays off Americans/Green card holders, and the companies just contract a price for the work. Disney can say they have no idea whatsoever of the immigration status of their contacted workforce.
Is it shady? Absolutely. Do I like it? Not a bit. But it's not against the law. If there's anyone you could claim might end up in legal trouble at some point, it's the contracting firm, not Disney. But even then, I doubt it: Body shops don't hire a citizen or permanent resident that is any good, because anyone that is good will get better money and working conditions elsewhere. They really don't get applicants.
So Disney contracts out the work to these body shops. The H1-B guy is an employee of the contracted-to firm, not of Disney. Disney is simply contracting out the work to a cheaper company. The contracted-to company says they can't find the workers, has enough lawyers to actually prove it, hires H1-Bs, and then contracts them to Disney.
No. Standard indemnity clauses in contracts, plus realities of current mass communications, judicial, regulatory and political practices, combine to let the abuse transpire as the normal course for a plurality of the visas.
HCL/Cognizant/Wipro/Tata/etc.: We offer an awesome IT work force for cheap.
Disney/American-company: Great. Of course, by this contract you accept full responsibility for making sure everything you do is legal.
HCL/Cognizant/Wipro/Tata/etc.: Naturally.
Reality steps in at this point. Various visas can be abused in the transaction. Unless there is national media attention like in this case, there is no pressure on the transaction to curb the abuses. The body shops don't care if one or a handful of citizens successfully complain and overturn their individual positions; these outsourcing+offshoring contracts are typically huge, and a few positions out of hundreds will not tank the deal. Even if abuse is uncovered (and lacking specific facts in even Disney's case, there is no telling if what happened actually would run afoul of any regulations), there are no interested parties with sufficiently deep pockets to judicially prosecute. Even if it was successfully prosecuted judicially, the fines are a slap on the wrist for the big body shops. Even if the case is big enough that the judiciary kicks over the case to the relevant executive agency(ies) for follow up, there is no incentive for the agency to enforce the regulations; the body shops are their biggest "customers". Diminishing volume by banning or restricting to a "sit up and take notice" level like 5% of historical grants, increases the agency's work load per granted visa. It is less effort for the agency to process fewer grants of big blocks of visas, so the big body shops are attractive grant targets for the federal agency's management. Even if the agency's management makes an exception to make its life harder for itself and decides to take action, its life doesn't just become operationally more difficult, but also politically, which can result in budget cuts in retaliation and rebound into more operational challenges.
The incentives are quite stacked against individual American workers without access to equivalent collectivized resources that corporations and syndicates have. This won't change until the cost of living in the US comes way down. The low-hanging fruit for US cost of living is real estate (not the buildings, the dirt), as that comprises a minimum of 30% of wages, and in expensive tech metro areas, closer to 50% of wages. That isn't likely to happen short of massive macroeconomic changes, so that is why I don't think this situation will change in the near to mid-term (4-5 decades) future, if ever.
I wonder if a Purchasing Power Parity (PPP)-based reciprocal visa exchange might help ameliorate the situation, at least for citizens who can work remotely. For X visas granted to a nation, that nation immediately grants X * PPP-factor resident visas with the same duration to a random lottery of Americans who sign up for it, with Americans displaced by an H1-B receiving priority. Make the identification of displaced workers by time not by job, to avoid companies gaming the system. If a company lays off a citizen within X time, and hires an H1-B into any position within the same time period, regardless of the H1-B's job position or geographic location, then that citizen is counted as displaced. If by PPP the median wage in the US is 10X over India, then for each H1-B granted India opens up 10 visas of the same duration for Americans by lottery (or give first dibs to anyone who is replaced by an H1-B). I don't see this really helping older American workers closer to retirement, but for the subset of the HN crowd who see a streamlined visa process to live in India while building out their MVP and getting revenue traction, taking the "living day-to-day" expenses portion of their seed funding and expanding it out 5-10X could be very attractive.
What you are missing is that they must be paid the prevailing wage for the occupation, not the prevailing wage for the company. This is an important distinction.
Many large and profitable companies find themselves in the position of systematically paying high wages for objectively mediocre employees, a situation that accreted over time. They may not have always been overpaid, just that over time their value and performance has become decoupled from their wages. If you've ever worked at old behemoth companies, they often have entire divisions full of employees that could be accurately described this way but the business is profitable enough overall to absorb paying large groups of people that do not produce much value. This is a management failure to the extent they allowed value and talent to become decoupled from wages over time.
So how does a company correct this so that pay more accurately reflects talent and value created? Asking employees to take a pay cut to reflect their market value is not feasible, particularly if the company is profitable. In these cases, paying the "prevailing wage" to H1b employees to do the same job on a wholesale basis is actually cheaper than the status quo and much easier than suddenly requiring existing employees to have pay that reflects their market value when the entire business unit is systematically overpaying for value.
Outsourcing of business units is often about clearing out deadwood divisions where few people have performed to their wage in ages. It is an unfortunate and real problem. It isn't just overseas either, I've seen this done entirely within the US many times. There is no easy way to re-couple wages and performance for a big organization when they have been allowed to drift apart for years so most companies opt for a complete reboot.
It is very important to understand that Disney did not hire H1Bs, because it couldn't do so. It would have been blocked by the H1b Visa rules. What Disney did was to subcontract a company to take over certain parts of the IT infrastructure.
Disney can easily argue that it is in its own economic interest to find and use the path that generates the most profits, while legal.
The same as the argument that it is in everybody's own right to use any loophole to pay as little tax as possible.
And both arguments are enshrined in what makes America great and allows for everybody to have a shot at the American Dream.
Now, you can read my lines above and maybe sense a hint of sarcasm.
But I find it disingenuous to blame the H1Bs as being the problem.
The key loophole that is use to justify hiring the H-1b is the "qualifications" the basics are that you take their resume, copy all of it, put it as a job posting in a public place and then get no applications for the job because you can use any discrepancies between the applicants resume and the "posting" to say they are not qualified. In reality you will get almost so applicants for the posting anyways.
I'd also be curious if there was some possible form of recompense possible, like a class action suit.
(To be clear, I'm just tossing legal terms around that I have a vague understanding of, and I know that's what I'm doing. I'm asking for those who might know more for the real info. Emphasis "know".)
They could if they wanted to, but I don't know if I'd want to be known as the guy that sued his employer.
Normally the plaintiffs see very little of the cash if they were to win, it's normally the lawyers that make out like bandits in those cases so it wouldn't be worth it.
Most likely anyone at Disney that was facing layoffs and has marketable skills will leave.
"I'm sharing news about it because this experience has taught me the H-1B Visa program needs to change to protect others in the future."
Anyone who still supports FWD.us and believes that the US doesn't produce enough professionals to satisfy the needs of our businesses is straight up, while they are reading this, actually holding a crack pipe to their mouth.
I'm not clear (or arguing the point) about how this is specific to H-1B. Companies routinely lay off older, more expensive workers to get cheaper, younger employees. It's not what companies should do, but they do it all of the time.
And then there's this, where apparently Disney cancelled the layoffs:
Which I don't see how that's entirely possible given that the article posted by OP specifically states that many employees were already let go in January.
I can only speculate that the January layoffs were executed, and over the past week it was discovered that the 'replacement contractors' weren't the cheap magic rocket that Disney expected. That, too, happens in companies all of the time.
Anyone else read the article with the nagging voice saying:
"Oh crap, we got caught trying to really bend the H1B program and have irked our main customer base. We'd better say that we are undoing it then put a policy in place to more slowly drive out everyone making more than minimum wage by using bad reviews and implementing impossible goals. No one will notice if we do it slowly."
Protectionism doesn't work. There is wide consensus among economists on comparative advantage [1]. Healthy, non-protectionist immigration policies have been proposed to have similar effects as free trade [2,3].
How do you determine what's "healthy"? Millions of Americans are caught in an endless cycle of poverty and we're fighting a $15 minimum wage. We've shipped millions of manufacturing jobs to China so it's harder to get a good job without a college education. Now we want to reduce the salaries of well-paid jobs by onshoring them.
I'd say we should take a closer look at what we're actually doing.
But by your reasoning, "we the people ... deciding" is good enough justification for government action. There need to be limits on "we the people deciding" other people's affairs - that's elementary.
The protectionism in this situation is protecting the company from having to participate in an open and free employment market. Import some slaves, threaten them with immediate deportation if they don't accept substandard pay and substandard management...
The anti-H1B folks want to remove the protectionism and have a fair employment market.
I don't like slavery, don't like H1B, and I think a perfect solution would be to shut down the H1B program and hand every participant a green card if not outright naturalization papers.
We have enough class problems in the USA as it is. Having the .gov encourage the creation and growth of a slave caste via the H1B program is the last thing we need.
Actually, the dirty secret amongs development economists is that protectionism works when you're trying to establish yourself in an industry. If you look at a number of successful developing countries, they first created protectionist policies to nurture homegrown companies. Once those companies matured and acquired skills/knowledge, they slowly remove those policies to compete on a global level.
Of course, it's different for a developed country like the U.S. But I object to those who blithely proclaim that free trade is the best solution. Even when you look at the U.S., freer trade has led to clear winners and losers -- the winners being bigger profits for corporations, and the losers being those who have lost their jobs.
I'm not sure what a better solution looks like, but increasing globalization forces us to grapple with some very real issues and growing inequality.
> Any immigration policy short of opening the borders completely is "protectionist".
How so? The idea of comparative advantage is that one country has a market, another, the means to provide for that market and you facilitate this 'trade'. India, China, pretty much most countries have plenty of top notch talent that cannot be satiated by opportunities within their own countries. These are not necessarily geniuses, but most high-performing highly skilled workers qualify. The satisfaction that these highly talented folks seek is often provided only in the US. For a moment, set aside the notion that people want to work in the US for greenbacks. This is only partially true, in my experience. Most friends and colleagues I know want to immigrate because their jobs are higher quality, as is the work culture, etc.
US provides the (job) market for top talent, China, India, Europe, etc. supply the talent.
Protectionism in this situation is just the act of putting ill-conceived roadblocks in this 'trade'. No one is asking for open borders, just a fair system where this 'trade' can be carried on smoothly.
Non-protectionist would be free traffic across borders like within the EU. Any immigration policy is a form of protectionism.
BTW, I find your naive notion of the US as the promised land rather unsettling. Personally, I don't know anybody who would want to immigrate to the US, and especially not for the archaic, exploitative work culture.
Yes, this is matter of perspective. But you seem to be lacking any other perspective than US good, everywhere else bad. Which is probably one of the reasons why it's so easy to exploit immigrant knowledge workers in the US.
I think the problem is that occupation-specific visas may distort markets in a way that general immigration would not.
Now, short of open borders in every direction, any immigration system could be seen as a form of protectionism. But an immigration system that allows people to come in as free and full citizens, without requiring them to have a specific academic background or have a job offer from a specific kind of company in a specific kind of position (tech, in this case), would do more to preserve the positive qualities of a free labor market than targeted, industry specific, role specific visas.
Let me give an example of what I mean. Suppose that a country with a large and valuable market has a 100% protectionist tariff on all foreign grown fruits and vegetables. The next day, the government removes tariffs on lemons only. Would that lead to a freer market in fruits and vegetables?
Most likely what would happen is that anyone outside the borders seeking access to that market would start producing lemons, and anyone inside it would seek to start producing something that is still protected by tariffs. Domestic production would collapse, imports would soar.
I think this is essentially what the US has done with IT. We've created very specific visas for a narrow band of roles, under the assumption that there is a "shortage". Open borders are a political non-starter, but we could replace this with a lottery that allows people to come here as free and full participants in the labor market, welcome to choose whatever field they like. This way, tech employers would have to actually compete in a free labor market.
My opinion, like a lot of people here, is that there really is no shortage, in the sense that aversion to tech careers may be very rational when you consider options available to people with the talent to do tech. Without these visas, tech employers would actually have to compete with finance, law, medicine, nursing, and dental hygeine, and so forth to hire workers.
There is no reason immigration would need to subvert this, all we need to do is allow immigrants to come here as free citizens with choice, and not force them to study a particular field or work in a particular job role as a condition of coming here.
The "crack pipe" is in believing that these two situations are equivalent:
- Disney replacing IT staff in bulk with outsourced workers.
- A small (or large) technology firm wanting to hire a specific, highly qualified, but just happens to be foreign-born worker.
The outsourcing companies consume so much of the H1-B pool that the people who want to use it correctly can't, and then people like you start talking about crack pipes.
....because they could have done this without an H-1B Visa program, and in fact, even in the hospitality service, they probably could move a lot of those jobs flat out overseas. Arguably the H-1B Visa program at least keeps the US labour market somewhat competitive with the overseas markets.
No, there are a bunch of problems here, but access to immigrant labour on domestic soil isn't really even near the top of my list.
I believe the US, or any other Western nation, doesn't produce enough professionals to satisfy the needs of our businesses. (Source: I'm a hiring manager.)
I also believe however that this situation is being abused to suppress wages by bringing in underpaid labour in a market that already needs a big upward salary correction to account for the shortage and economic value of these professionals.
Abusing and manipulating the problem out of short term self-interest doesn't mean there isn't a problem. In fact it's a very common pattern. See for instance the war on drugs.
I used to rail against the H1-B program until I realized that the body-shop consultancies aren't hurting demand for my services. . . they're increasing it.
It seems like at least 75% of the body-shop projects end up being so poorly executed that people like me inevitably get called in to revamp and clean up the mess.
By all means, corporate America, keep giving out big projects to the lowest bidder, who will throw their international cheap labor at it. Then call me up to pick up the pieces in a year or two at my usual high rate, working from home 100%.
Then the project ends up being delivered late, over budget, then the middle-managers that signed off on it get replaced or reprimanded by the execs. Vicious cycle.
If you see the way these body-shop projects are pitched, it's one of the few things that make me lose hope in humanity. They bring in an exec who pitches the project, undercuts the competition by about 50%, then they staff some PMs who have no idea what they're walking into.
And if you sit through one of those pitch meetings, take note of who they bring along to demonstrate capability. Other than your account rep, you will never see any of those people during the actual project. You will be sent a bunch of "freshers" who are barely competent. The Center of Excellence (COE) staff are essentially technical pre-sales staff.
"... and they routinely sacrificed personal time and freedoms to help make your experience in the parks what it was". Never do this unless its a startup you own. You get paid for X to do Y hours and nothing more. Anything more is volunteer work for a for-profit employer.
That's a pretty cynical attitude. It's definitely possible to work for a for-profit company and still care personally about the success of whatever they are doing. You don't have a moral obligation to bend over backwards for a company, but it's ok to be committed for reasons other than a paycheck.
> It's definitely possible to work for a for-profit company and still care personally
It is certainly possible, and usually very much appreciated (sometimes even rewarded) in the short term.
Just don't expect it to make much difference to how you are treated over the longer term. The company won't forget that you are an employee and you shouldn't either. Heck, a company with shareholders is practically legally obliged to screw you over if it is better for the company to do so than not.
> Heck, a company with shareholders is practically legally obliged to...
You are spreading the myth of a US (and most nations, for that matter) legal obligation (the term of art is "fiduciary duty") of profit maximization to shareholders. Please read the following.
If you are an attorney, then in the past somewhere on Harvard Law's site I found an exhaustively-written piece that gives specific case law citations I could cross-reference from Lexis-Nexis. The bar to clear to prove fiduciary malfeasance in corporate governance is very high, and the latitude granted to company management very broad; shareholders can enforce a fiduciary preference through shareholder activism and throw out management, but the US judiciary has steadfastly refused to lightly step into the management-shareholder relationship in this regard.
This blog post delves into the follow-on questions more in the vein of corporate social responsibility once you acknowledge the legal reality.
That is why I said practically rather than literally. It depends how scared management are of shareholder action (or, more cynically, how willing they are to use that thought as an excuse for what they wanted to do anyway).
Stories like this one justify the cynical attitude. Corporations are not family.
I personally transitioned from startup life to big-corporation specifically because the expectation to pull nights and weekends was physically burning a hole in my stomach. I will put in extra when requested of me, but I now take a much, much more critical attitude towards such requests; when you work for a publicly-traded company that has to report its balances to the SEC, it's pretty hard for them to claim poverty when they ask more of you.
True, I was just pointing out that large companies are typically aware of 8-to-5 attitude, and at least try to mitigate that, so an employee that's kicking in extra hours might not be foolish after all.
I usually don't comment on immigration policies because I'm a US citizen and have never been an immigrant worker, however I dont believe this affects the long term success or failure of the H1B visa program and nor should it. We do exist in a global economy and you must therefore compete globally. If a company feels that they can get equal talent to mine in another country for cheaper costs then so be it; I didn't do a good enough job selling my talent or showing why Im worth my rate. Its also the company's loss if they chose to lay me off; I know what Im worth and Ill go find what Im worth. Even without the H1B visa program, companies will still do this; whether or not the company can employ the employee on US soil or not. This is in no way threatening to my way of life or makes me fear for my future career prospects. It sucks that Disney did this to their employees, but companies are no longer loyal to their people and haven't been for a long time; you should act accordingly and not show any loyalty to a company that shows you none.
> We do exist in a global economy and you must therefore compete globally.
I completely agree, but that's not what the H1-B visa program does. It allows companies to lock in immigrant workers at a lower rate and little to no job mobility. From a companies standpoint it is obviously what they want - pay less, and job lock in!
The fix for the H1-B is true immigration reform. We need to make it easy for people to come to the US and enter the job market just like anyone else.
Who's "us"? I don't know you, and I have friends who aren't Americans who have been prevented by immigration policy from taking jobs here that I know they'd have been great at. Why should I care more about you keeping your job--just because we were born in the same politically defined geographic area?
But if you need a self-interested explanation: because you don't want to be competing with people who have artificially-restricted bargaining power and so have to take lower wages. The H1B program as-is, like the old bracero program for farmworkers, is a "compromise" that benefits corporations at the expense of both native-born U.S. citizens and immigrants.
Why should you care? Possibly because you realize that undercutting your countrymen, the people you have to live with now regardless of whether they are employed or not, is something that makes your actual community now a worse place.
Call it self interest, but I want to live in a society that is functional and with neighbors that are happy. The alternative is to retreat further and further into an affluent bubble. Then, I admit, you don't have to care.
As soon as someone immigrates and becomes a citizen they are also your fellow countrymen.
Where the next huge industry starts, wherever that happens to be, will define the next super power. Having the US be attractive for foreigners to immigrate to and become citizens raises the odds the US will be that place. I don't want access to the Chinese or Indian stock markets, I want the best of their citizens to want to immigrate to the US and start companies here because the US is the best place for company formation (not arguing either way atm, just saying what I want). This type of environment raises all boats.
Instead we teach other countries best, send them home, and yield few of the benefits as they go on to start companies.
By that argument, it seems like you would be in favor of being extremely selective about who becomes your next fellow countryman. If he turns out to be a liability, you're just that little bit further away from being the next superpower. He may well not, but what if he does?
Could there be social welfare costs? Rising income inequality? Unemployment of current citizens?
If you want to frame the problem in economic terms, a frank discussion of the risks is mandatory. Right now we usually talk about it like a ca. 2008 banker might have talked about naked credit default swaps. Sure, there might be a risk. But think of how much money we can make!
"Community" is loose term - choosing to limit the boundaries to "your country" is arbitrary. There is an argument to be made that having the people best suited for a job work on it will improve long term economic viability of the product itself and in turn availability of the product to the "community". There is also the risk of losing the best talent to an entity outside this arbitrary definition of community and then get crushed by a superior, competing product/service - where is the economic sense in that?
Borders are another way of saying "local control". If, all things being equal, you would rather that political decisions happen closer to you than further away, then you are in favor of (arbitrary) borders.
I think it's an error to view concepts such as "community" and "your country" as quaint abstractions while putting full faith in "the product" and "economic viability". Economic arguments are important, but not comprehensive to the human experience. All things being equal, I'd rather live in a decent place with a decent economy, than a terrible place with great economy, or the reverse.
So I am skeptical of arguments that demand economic optimality over all other competing concerns such as culture, "community", happiness, etc. Perhaps economic optimality has diminishing marginal returns?
Economic optimality, in this case, is merely one of any number of quantifiable measures you can use to define what is decent vs terrible.
How does the place of birth of people working jobs (that they are good at) change what you call decent or terrible - what is your measure?
Because if you don't let them come in and compete fairly, your employer is going to bring them anyways, at half of your salary, and let you go with a kick in the ass.
Those are not your jobs, those are jobs for the take. If you don't like the situation maybe you should consider aligning your interest with the people that is in the same boat with you, not necessarily with the ones who happen to share your nationality.
I suppose the logic is that with the same bargaining power as domestic workers, there would be a lot less exploitation. By extension, "job taking" by underpaid foreigners would decrease but competition for jobs would increase.
Exactly. I have worked with many new/aspiring Americans and have no problem with them and welcome the competition. The problem is that they have much more to lose, so they are open to abuse. If I don't like a job, I can quit, but they can be deported. Current immigration policy treats foreign workers like crap and nobody should have to compete with another worker with the same skills but with a government stamp that allows them to be treated like garbage.
Who is _us_? As soon as someone immigrates here and becomes a citizen they are us. Way more dangerous than losing your job today is losing the next silicon valley because we refuse to let people who want to come here, work, and become citizens actually come here, work and become citizens.
If a country like the US were to open its floodgates to foreign workers most jobs, top to bottom, will be displaced by cheaper labor and wages would fall precipitously in the course of only a few years. Prices for durable goods, housing and land generally would not. The only question to ask is who exactly is served by this kind of policy? Rest assured not you, the worker.
> If a company feels that they can get equal talent to mine in another country for cheaper costs then so be it; I didn't do a good enough job selling my talent or showing why Im worth my rate. Its also the company's loss if they chose to lay me off; I know what Im worth and Ill go find what Im worth.
This is a very common line of thinking among the younger crowd. And especially in IT, since we all think we're brilliant ("I work at Google, I'm a pretty big deal"). The thing is though, one day in your 50s you ARE going to get replaced and it probably won't be because you suck, just that you're too expensive to keep around. And you may never get hired again. It DOES happen, and while a protectionism policy seems, like, totally unfair to everyone else, at the end of the day you have to look out for yourself.
> I didn't do a good enough job selling my talent or showing why Im worth my rate.
Why would the company hire you, when they can get someone almost as good as you but ready to work for low salary because they dont want to live in India and are afraid to open their mouth because then the employer would send them back to India.
Reading between the lines it sounds like Disney are executing an outsourced IT transformation involving offshore IT application delivery (maybe maintenance, IT ops etc.)? Flying in staff from offshore teams to shadow/train with the team being reorganised is standard practice from what I've seen.
It isn't pretty but it's not like Disney are breaking new ground here...
Like Americans, such unscrupulous program also ends up hurting genuinely talented and skilled foreign workers.
Many 'consulting firms' end up hiring/slaving thousands of workers(hence using the H1-b quota), whereas others(not exploiting the loophole) end up not getting called on the lottery.
A rational and realistic discussion is necessary, but most end up becoming too biased and extreme("don't let anyone come here").
To voice your opinion, email guest.services@disneyworld.com.
This was the reply I received:
Dear Guest,
Thank you for contacting us regarding recent media reports about the information technology restructuring at Disney Parks.
We greatly value the contributions of our Cast Members. We take great pride in the fact that we have regularly been ranked as one of the best places to work in the United States, but we are always looking for ways to improve.
Contrary to the misleading impression conveyed by certain media outlets, our recent IT restructuring actually resulted in the expansion of our Disney Parks IT team and the net addition of 70 new IT jobs in the United States. That's in addition to the nearly 30,000 jobs we've added in the U.S. over the last 10 years. And all of our efforts are geared toward enhancing our ability to deliver the best possible experiences for our Guests.
We appreciate your feedback on this issue.
Sincerely,
Matthew Cooper
Guest Experience Services
Walt Disney World Resort
Sadly, none of which says anything about the 70 new jobs and 30,000 jobs total added in the US being non-citizens. New jobs in the US != NOT H1B workers. Skillfully avoiding the topic, but I guess that's why he has that job.
And I say this as a non-citizen working in the US.
I work at a company which was a victim of a hostile take-over from the VC. An Indian-American who is part of the VC firm has taken the reigns as CEO and ejected the founder.
The first thing he did was lay-off dozens of technologists and outsource their roles to India. The software fell apart, the people sucked (I was in charge of managing a few, and it was in general an awful experience), and the customers started leaving in droves. Everything about our highly custom software requires rapid responses to customers. It's impossible when you have people, no matter what their skill level, 12 time-zones away.
The CEO back-pedaled, and brought Americans back on. Suddenly, the customers are coming back, and we are growing again. We were always profitable, but he doesn't like the margins. So now he has again tried the outsourcing strategy, but decided to open an office directly in Pune and have direct hires.
The customers are already, once again, suffering. A competitor who does zero out-sourcing is eating our lunch with new customers. (if not for a strict non-compete, I'd jump ship to them in a heart-beat.)
I'm leaving the company, because it sucks working for a CEO who is a poor leader and not creative enough to find ways to make money other than simply cutting costs. I've been here less than a year and have single-handedly built two pieces of new software that are in production with customers. It's been hard, because all of the knowledge has left. The people in India are completely disconnected from the customers.
Outsourcing makes sense to some degree if a company has a core job other than software, and IT is an employee facing role rather than customer facing, but only if it's a somewhat plug and play job that doesn't require lots of domain knowledge.
If you're a software company, and you want to compete, good luck.
My recommendation to anyone on this list:
If you find out that a potential employer outsources, know that this is a sign of someone who sacrifices employee and/or customer happiness to increase profits. This is also reflective of a company that doesn't know how to creatively boost profits in value-add ways.
My CEO has deluded himself into thinking he is adding value, because he can increase the number of technologists for each customer.
Perhaps most comical about the whole thing is that we are a small company with 50 employees, and there are more executives than US based technologists now. I'm looking forward to giving my 2 weeks notice, but not happy about what the impact is going to be on my customers.
As reported in the original NYT article, the 70 new Disney IT jobs are actual Disney employees, not the controversial outsourced contractors (though the new Disney employees may or may not include H1-B workers).
The eliminated Disney IT jobs were outsourced to a contracting shop. The contracting shop hired H1-B workers to perform the outsourced work. The net overall effect appears to be that H1B workers replaced Disney IT workers.
If you look at the corporate level: Disney didn't hire any H1-B workers as part of the restructuring, ergo Disney didn't replace existing jobs with H1-B workers. The contracting firm didn't fire anyone, ergo the contracting firm didn't replace existing jobs with H1-B workers. But apparently nobody is accountable for the overall effect.
Disney and the contracting firm are both corporations.
Corporations do not exist in free markets. They are a product of nothing but legislative intervention in the free market in the form of the Companies Act (the reformed version of the 1850's) and its descendents around the world. Without this interference in the marketplace, corporations in the modern sense cannot and did not exist.
The only reason this kind of situation can arise is because of the nature of corporate relationships, in which the actions of individuals are hidden behind the collective mask of corporate ownership. Otherwise, it would be, "Jane fired Fred from America and replaced him with Amir from India" and the locus of effect would be undeniable.
It follows from this that the lawmakers who intervened in the free market to create the corporate form of collective organization are--or ought to be--held responsible for the overall effect of corporate behaviour. The likely corrective action, as our Libertarian friends tell us, is further intervention in the free market in the form of regulation on this sort of behaviour.
Yes; in a way it's laundering by placing a 3rd party in between to achieve the outcome, but the contracting shop could not complete or offer such savings without leveraging the H1-B system. Remember you can't replace employees with contractors, and outsourcing is suppose to be taking your service and transitioning it to specialized experts, so leveraging outsourcing to do layoffs, to cheap staff new to the field and training them is walking a line. Also instead of repositioning your staff into the new 70+ positions, forcing them to leave then re-submit is poor leadership, and it forced them to renegotiate new lower salaries.
I'm an at-will employee, sponsored by my employer. I can transfer the visa to a new employer by resubmitting an LCA, but if I lose my job for whatever reason I have ten days to get a new job or I'm out of the country.
Now... finding a job, getting an interview, having an offer made, accepting the offer, and getting the paperwork in? Good luck doing that in ten days.
This is the biggest problem with the H1B visa system. It's essentially a system that primarily benefits outsourcing shops by giving them a kind of deportation leverage over their employees.
We should remove the sponsorship restriction and simply allow foreign workers who earn a minimum threshold. This is how Singapore does it. It might be 50k. It might be 70k. It might depend on geography and/or a market rate.
Want to control the flow of immigration for certain jobs? Simply raise or lower the thresholds.
I want to live in a country based on merit based principals that attracts the smartest and most hardworking people from around the world and to provide them the opportunities to start their businesses here.
I don't want to live in a country that schemes with immigration lawyers to rig a system that screws over foreigners and citizens alike for the benefit consulting firms that like to exploit workers.
We all lose when we allow class based systems to fester in our society.
> Want to control the flow of immigration for certain jobs? Simply raise or lower the thresholds.
It bears emphasizing that this would be great for employers- Maximize the labor pool and costs drop.
Incidentally, this is why we are seeing so much effort to get more women into programming. Big companies aren't throwing millions at this because of a moral calling to achieve gender parity- They know that the more (historically, easier negotiating) women who are coding, the more labor costs decrease.
It will be interesting to see how many "SJW"s will still be pushing women into coding when their own salaries start to plummet.
As another non-citizen I'll add that I'm a 'full time' employee (in an "at will" state) and not on a contract. My visa expires 2 years from issuance but can be renewed (from an embassy outside the US). Like the H1B, I cannot remain in the US if I lose my employment but also like the H1B I can transfer my visa to a new employer.
I'm on a country specific visa though so my experience may differ from others. Notably, my visa class doesn't have a 'lottery'.
What Disney has done is certainly reprehensible but fully legal (given the "contractor" loophole in the H1-B program).
However the backlash is focusing on the "them foreigners taking our Jobs" aspect a bit too much.
What should be troubling is the fact that someone in the Executive Suite contracted out important IT functions (such as these jobs were I am assuming).
If the CIO/CTO etc are perfectly wiling to disrupt core functions to shave off some costs - you have to wonder about the strategic abilities of these highly paid morons who cannot think past the next quarter.
That is the real outrage - whether those outsourced jobs are done by H1-Bs (or even possibly L1-Bs who are much more prone to abuse) is the minor part of the story.
> If the CIO/CTO etc are perfectly wiling to disrupt core functions to shave off some costs - you have to wonder about the strategic abilities of these highly paid morons who cannot think past the next quarter.
Agree, but isn't this a broader issue with the system of incentives in a publicly traded corporation? The drive to sacrifice core capabilities in exchange for short term profits seems to be a widespread recurring problem.
The entity in question is the theme parks operator, not all IT departments across all Disney entities.
Time will tell if Six Flags, Universal or SeaWorld would lock in significant advantages by having access to higher quality IT, while Disneyland/Disneyworld ticket sales would decline due to inferior IT.
"If you view your staff as a liability, it's more likely a leadership problem."
If a company's employees are not an asset, then leadership hasn't done it's job of either weeding out the bad people or spending enough money to attract and grow good people.
The leadership was able to increase their compensation 42% over the course of a year last year so, if that's what their focus is for this year, then maybe they are by cutting these folks, reducing costs, etc for whatever metrics get them more cash.
Yet another xenophobic article. What if disney hired an American contractor that replaced their old infrastructure with new age docker/cloud/YC-funded stack and were able to save costs by cutting 250 positions replacing them with 50 pure blooded americans (oh wait and another 10 pround "undocumented" immigrants). The reality is that this person is on the wrong side of efficiency argument. And he is just blaming his incompetence on others. I expect better from HN than to give voice to this xenophobic trash.
No. I have no problem with outsourcing, or foreign labor. I've lead such efforts myself. I'm not a xenophobe. I've not in favor of scrapping H-1B Visas. It's easy for you to dismiss it by tossing labels. I'm not even angry or anti-Disney; I'm smart enough to see it for what it is. I've been in IT and a developer for a long time. I've seen it all. I didn't know how badly the H-1B system was being used to create labor forces for the maintenance of services instead of what it's for - bringing in hard to obtain talent, until I encountered it. Jobs are being lost to this, highly talented jobs, by the thousands, and it's not suppose to. It's suppose to augment your staff. Almost overnight 3/4ths of our office building were speaking a different language. Even if you don't see any of it that way; do you really think you'd approve if you had a good review, a raise, and then were told you're being replaced and you have to train your replacement or they're going to keep the severance you're entitled to by corporate policies? I don't think anyone sees that as professional or acceptable.
You're misunderstanding what people are upset about. The whole situation feels unfair and heartless. The employees had been doing a good job and they weren't given the option to take a pay cut to keep there jobs, instead they were given the option to quit or to work for a few months training their replacement. That kind of situation sounds horrible.
The people who are replacing them can't move around as freely in the job market as normal individuals, so they're willing to work for less than someone who didn't have that restriction. And the program they're using to come over here wasn't established to replace jobs, so it being used like this seems unfair.
So, "xenophobic" is the new word for being upset for when a business figures out a way to skirt laws to destroy people's lives and careers that they spent years working towards.
Having worked in an industry that supported Disney as a client once in my career, I find that whole firm contemptible, and this behavior doesn't surprise me at all.
There are so many variables at play. Author is looking at it from a narrow window. I'd not blame him as this affects him personally. That said, what are some other variables?
(1) Polyfill Disney is a global company and their management have to balance hundred different priorities that includes reducing HR cost. Don't be shocked if all of these H1B/L1 replacements are replaced by some highly automated systems in the next 5-10years.
(2) Economics Ask yourself why are you using Uber over local taxi, Airbnb over Hilton, Target over Wholefoods? Be it corporation or individual, in all these cases, you are getting pretty much the same service at a reduced price. It's not a deal breaker when you are looking at replaceable cogs.
(3) Enforcement There are some gray areas. H1Bs should be used where local resources are difficult to find or not at par with job requirements. Companies based in Bay Area, NYC, Boston, Austin, Houston and Denver face this problem day in and day out. I don't know how this spans out across the geography.
(4) Skills If you are really good and someone who has been diligent about keeping his skills and knowledge up to date. You should have no problem finding your next gig. If you have a tendency to take the union mentality. That's probably not going to work.
(5) Attitude I tried and failed to get a friend's resume across our recruiter. He is a former federal software engineer whose best skills read ~ COBOL and SQL. He is living in Bay Area, but refuses to try shops like Hack Reactor. Never stops blaming foreign workers. Somehow under the illusion that he has a birthright to that job. Taking your environment for granted is not wise.
I think the H1B program is great when it works, and I've seen it function because I've worked with some amazing and talented workers from countries such as India, Spain, France, etc. I really felt like we nabbed the best people from those countries. For these engineers, the US should be stapling green cards to the backs of their pay checks.
The problem here is that this group of workers is clearly being hired only because they provide a steep discount to local talent. This has nothing to do with skill, and in fact usually the engineers who take these positions are low-skilled. Think about it, who else would take a steep pay cut, work unreasonable hours, and take on a supervisor who threatens deportation on them?
For every H1B we hire in this category we make it harder to bring and keep a skilled worker. They don't fit the mould of disposable and cheap labor, so they don't get sponsorship. They refuse to take a pay cut just because they're a foreigner, and rightly so.
Most has echoed my thoughts on this, but I wanted to jump in to offer this article from Cheat Sheet. I think it sums up quite well the view of modern corporations towards their employees. The main point being: If a corporation can increase their profits by screwing you, then they are more likely than not to do just that.
"Your Employer Is Not Your Friend, and Young People Know It"
By Nikelle Snader, www.cheatsheet.comView OriginalMay 31st, 2015
Am I the only one that has any problem with the idea that citizens of a particular country feel more entitled to well paying jobs than comparably capable foreigners?
I can understand the feeling, I just can't justify it by reason.
It feels like these workers have more of a problem with the general low standards of worker's rights and labor protections than with H1B visa quotas...
Because the citizens and those that came before them have the history of the building up the country that has fostered a good standard of living, rights, environmental standards, etc.
It is unsurprising they feel they are more entitled to the benefits than those outside the country who did not. It is a complex situation but that is the general gist.
So they have the right to a good life because they always had a good life?
I can understand that such thinking is convenient, but especially those who are afraid of outsourcing haven't done that much "building" at all. And how come that in virtually any other regard competition and free enterprise is enshrined, even to the detriment of poor people and low income workers, but not when origin is concerned?
For me this entitlement does not follow immediately from some kind of ancestral rights.
I've said this before and I will say it again, programming is an entry level job. A programming (Application development) career is definitely not something you want to grow old in (unless you're a rockstar which most of us aren't). Get an MBA while you can or start your own at a younger age.
Oh I see. That's an interesting point. I only ask because when I copied the link into a new post I realized it was the only time I'd ever done that in years of using G+. In any case, as someone who's never really worked in a very large organization this post confirmed some of my previous suppositions about why I'd probably never be happy in one :/
It's surprising to me that Disney was able to replace its local workforce by foreigners via H-1b visas, since I always thought that companies making use of this type of visa were required to prove that they would not be able to find an employee with the required qualifications in the US? Firing an employee to replace him with an H-1b holder seems to completely contradict this requirement.
Also, reading the visa requirements it seems that the company would be forced to pay an H-1b employee a salary which is equivalent to that payed to a "normal" employee performing the same function, so there does not seem to be a huge financial benefit in this either.
Can anyone explain this?