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OM in the News: Disney Outsources IT to India — and Workers Cry Foul

June 8, 2015
The Team Disney building in Orlando which houses most of the company's IT operations

The Team Disney building in Orlando which houses most of the company’s IT operations

The employees who kept the data systems humming in the vast Disney fief here in Orlando did not suspect trouble when they were suddenly summoned to meetings with their boss. While families rode the theme park rides, these workers monitored computers, making sure millions of Disney ticket sales, store purchases and hotel reservations went through without a hitch. Some were performing so well that they thought they had been called in for bonuses. Instead, about 250 were laid off. “Many of their jobs,” writes The New York Times (June 4, 2015),  “were transferred to immigrants on temporary H-1B visas for highly skilled technical workers, who were brought in by an outsourcing firm based in India.”

Disney “made the difficult decision to eliminate certain positions, including yours,” as a result of “the transition of your work to a managed service provider,” said a contract presented to employees on the day the layoffs were announced. It offered a “stay bonus” of 10% of severance pay if they remained for 90 days. But the bonus was contingent on “the continued satisfactory performance of your job duties.” For many, that involved training a replacement, and the new workers took the seats at their computer stations.

Former employees said many immigrants who arrived were younger technicians with limited data skills who did not speak English fluently and had to be instructed in the basics of the work. HCL America, a branch of a global company based in Noida, India, won a contract with Disney. But the layoffs at Disney are raising new questions about how businesses and outsourcing companies are using the temporary visas to place immigrants in technology jobs in the U.S. These visas are at the center of a fierce debate in Congress over whether they complement American workers or displace them. According to federal guidelines, the visas are intended for foreigners with advanced science or computer skills to fill discrete positions when American workers with those skills cannot be found.

Classroom discussion questions:

1. Why did Disney make this change? Is it a common strategy?

2. Discuss the merits and problems with the H-1B program.

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3 Comments leave one →
  1. terry boardman permalink
    June 8, 2015 4:48 pm

    Disney is absolutely unethical and Un-American. I will no longer respect nor frequent Disneyworld.

  2. June 8, 2015 7:44 pm

    Professor Boardman, thanks for your observation. I was not at all happy about seeing so many professional IT people here in Orlando lose their jobs either. Unfortunately, Disney is not the only company doing exactly what the article describes. it has become common to see the H-1B visa program abused. Our Senator in Florida is talking about opening hearings to deal with this.

    • terry permalink
      June 9, 2015 10:55 am

      I teach Loyalty is given what loyalty is received. Sad for employees still there- they are next and should start looking

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