Fury rises at Disney over use of foreign workers

Patrick Thibodeau
April 29, 2015
ComputerWorld

At the end of October, IT employees at Walt Disney Parks and Resorts were called, one-by-one, into conference rooms to receive notice of their layoffs. Multiple conference rooms had been set aside for this purpose, and in each room an executive read from a script informing the worker that their last day would be Jan. 30, 2015.

Some workers left the rooms crying; others appeared shocked. This went on all day. As each employee received a call to go to a conference room, others in the office looked up sometimes with pained expressions. One IT worker recalls a co-worker mouthing “no” as he walked by on the way to a conference room.

What follows is a story of competing narratives about the restructuring of Disney’s global IT operations of its parks and resorts division. But the focus is on the role of H-1B workers. Use of visa workers in a layoff is a public policy issue, particularly for Disney.

Disney CEO Bob Iger is one of eight co-chairs of the Partnership for a New American Economy, a leading group advocating for an increase in the H-1B visa cap. Last Friday, this partnership was a sponsor of an H-1B briefing at the U.S. Capitol for congressional staffers. The briefing was closed to the press.

One of the briefing documents handed out at the congressional forum made this claim: “H-1B workers complement – instead of displace – U.S. Workers.” It explains that as employers use foreign workers to fill “more technical and low-level jobs, firms are able to expand” and allow U.S. workers “to assume managerial and leadership positions.”

The document was obtained by Norman Matloff, a computer science professor at the University of California at Davis and a longtime critic of the H-1B program. He posted it on his blog.

Disney says its restructuring wasn’t about displacing workers, but was intended to shift more IT resources to projects involving innovation. That involves hiring many new people to fill new roles. Prior to the reorganization, 28% of Disney’s IT staff were in roles focused on new capabilities; after this reorganization, that figure was 65%, a source at Disney said.

“We have restructured our global technology organization to significantly increase our cast member focus on future innovation and new capabilities, and are continuing to work with leading technical firms to maintain our existing systems as needed,” Jacquee Wahler, a Walt Disney World spokesperson, said in a statement.

Disney officials did not want to comment about the situation beyond that statement.

From the perspective of five laid-off Disney IT workers, all of whom agreed to speak on the condition of anonymity, Disney cut well-paid and longtime staff members, some who had been previously singled out for excellence, as it shifted work to contractors. These contractors used foreign labor, mostly from India. The laid-off workers believe the primary motivation behind Disney’s action was cost-cutting.

“Some of these folks were literally flown in the day before to take over the exact same job I was doing,” said one of the IT workers who lost his job. He trained his replacement and is angry over the fact he had to train someone from India “on site, in our country.”

Disney officials promised new job opportunities as a result of the restructuring, and employees marked for termination were encouraged to apply for those positions. But  the workers interviewed said they knew of few co-workers who had landed one of the new jobs.

Employees said the original number of workers laid off back in October was more than several hundred. But the Disney source put that number lower, saying approximately 135 IT workers lost their jobs.

Disney has long used contractors at its IT operations in Lake Buena Vista, Fla., at a building called “Team Disney.” Workers on visas were likely in use well before the restructuring. But in the period after the October layoff notifications, IT workers said they observed a marked increase in people they believe were new to the U.S.

It’s difficult to determine how many H-1B workers, L-1 visa workers or contractor workers generally, were at this Disney site. Only a couple of workers asked the contractors where they lived or if they were on a visa. It was an awkward conversation and generally avoided. But one observation all of the workers recounted was the widespread use of Hindi.

Several of these workers, in interviews, said they didn’t want to appear as xenophobic, but couldn’t help but to observe, as one did, that “there were times when I didn’t hear English spoken” in the hallways. As the layoff date neared, “I really felt like a foreigner in that building,” the worker said.

In the Team Disney office, two of the contractors, HCL and Cognizant, had, in total, about 65 Labor Conditional Applications on file in the past year, according to records by MyVisaJobs.com for just that site. But there were other contractors working at Disney, as well, and it’s unknown whether temporary workers on L-1 visas were used.

Disney Parks and Resort CIO Tilak Mandadi, in a leaked memo shared Nov. 10 to the IT staff, described the planned transition, told about the posting of new roles and explained the goal to deliver new capability. Disney’s culture is to refer to employees as cast members.

The CIO wrote in part: “To enable a majority of our team to shift focus to new capabilities, we have executed five new managed services agreements to support testing services and application maintenance. Last week, we began working with both our internal subject matter experts and the suppliers to start transition planning for these agreements. We expect knowledge transfer to start later this month and last through January. Those Cast Members who are involved will be contacted in the next several weeks.”

One of the laid off workers believed there were other ways for Disney to achieve its goals.

“There is no need to have any type of foreigners, boots on the ground, augmenting any type of perceived technological gap,” said one worker. “We don’t have one, first off.”

Workers can be trained, because “once you are in the system and you are a learner, you are a learner for life in IT. You are going to constantly learn.”

Kim Berry, president of the Programmer’s Guild, said that “Congress should protect American workers by mandating that positions can only be filled by H-1B workers when no qualified American – at any wage – can be found to fill the position.”

The use of H-1B workers to displace U.S. workers is getting more attention in Congress. In response to Southern California Edison’s use of foreign labor, 10 U.S. senators recently asked three federal agencies to investigate H-1B use. But one agency, the U.S. Department of Labor, wrote back last week and told the lawmakers  that large H-1B using firms “are not prohibited from displacing U.S. workers” as long as they meet certain conditions, such as paying each H-1B worker at least $60,000 a year.