Disney outsources tech jobs

While companies generally exercise some level of frugality and make financially sound decisions based on the needs of the business and the most cost-effective measures, actions by some large companies are raising questions in the minds of stockholders and the public.

For example, the Walt Disney Company apparently terminated 250 American technology workers and outsourced the jobs to Indian workers brought in on H1-B visas. The purpose of these visas is to recruit workers from other countries for jobs that Americans cannot fill. Instead, the outsourced employees replaced already trained and qualified workers.

The new employees apparently struggled with speaking English and were not competent in their jobs. One terminated worker expressed his frustration with the seeming unfairness of the situation and has been out of work since Jan. 30, 2015.

A professor at Howard University reported that a company can save about 25 percent when they hire an H-1B worker. At some companies, the number of these workers has risen nearly 50 percent. While the savings initially seem significant, the contrast drastically drops when they are put in context of the earnings of a huge conglomerate like Disney.

For example, using data from the U.S. Bureau of Labor Statistics, the company would save an estimated $14.76 million. However, since Disney showed a net income of $7.5 billion during the last fiscal year, the savings represents just 0.2 percent of that total.

The amount will not make a difference in their bottom line and shows that the company is not operating in a sound fiscal manner. The company generates poor will from the terminated employees and instead spends huge amounts of money investing in unnecessary training. A CFO who understands business dynamics and community relations would likely employ different money-saving strategies in order to improve the company’s bottom line.

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2 Comments
  • Posted by RW Wesolowski July 8, 2015 at 1:02 pm

    This is an outrage, it's happening to often in American business. Mr. Iger and Disney Corporate executives have turned Walt's beloved Mouse into a Rat! Needless to say my family and I will not be going to Disney World anytime soon. If the 7.5 billion they made last year isn't enough I suggest the CEO and the Board of Directors take a cut in pay or refuse bonuses in the future. Maybe it's time to out source Mr. Iger's job.

    Reply

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