Disney Lawsuits Argue Against Persistent Reports of IT Skills Gap

Businessman laid off from IT job

Since the late 1990s, the public has been told repeatedly that there is an IT skills shortage in America. This conversation point has been regularly reinforced by the media on behalf of schools, corporations, IT industry associations, and the U.S. government. Any opposing claims by labor organizations on behalf of unemployed tech workers have been dismissed as regional aberrations, or isolated instances of large layoffs by major corporations.


There is growing evidence, however, that the reported IT skills shortage has been deliberately misrepresented — in order to take advantage of the H-1B foreign worker visa program.


Two weeks ago, technology website Ars Technica reported on two proposed class action lawsuits recently filed against The Walt Disney Company. These two lawsuits allege that Disney fired its existing IT department and replaced those employees with cheaper foreign workers hired on H-1B visas. The story gets more grim: The lawsuits also claim that Disney told the fired employees that, in order to earn severance pay, they would have to stay on for 90 days to train their replacements.


If these allegations are true, then Disney clearly violated two key legal conditions tied to the use of H-1B visas. First, an H-1B visa hire can only be used when there isn't a US worker with equal or better qualifications available to fill a specified job. Second, employers must state that the hiring of an H-1B visa worker will not result in the dismissal of one or more US workers.


Stories concerning businesses exploiting the H-1B visa program to replace Americans with cheap foreign labor have been appearing with alarming regularity in recent years. This exploitation has grown large enough in scale to have finally spurred a response from the U.S. government, as some politicians have begun admitting that the H-1B visa program is flawed.


In November 2015, a piece of bipartisan legislation was introduced in the U.S. Senate that could help curtail exploitation of H-1B visas. Senator Chuck Grassley, R-Iowa, Chairman of the Senate Judiciary Committee and one of the sponsors of the proposed legislation, stated, "The abuse of the system is real, and media reports are validating what we have argued against for years, including the fact that Americans are training their replacements."


Senator Dick Durbin, D-Ill., added, "For years, foreign outsourcing companies have used loopholes in the laws to displace qualified American workers and facilitate the outsourcing of American jobs."


This development may seem like good news for U.S. tech workers — until you consider that this legislation was first introduced in 2007. Nearly nine years later, there has been no meaningful movement on this issue in the Senate.


Is there actually a serious tech worker shortage in the Unites States? In December 2015, the U.S. Bureau of Labor Statistics reported there are 119,000 unemployed Americans who normally work in computer and mathematical occupations. Meanwhile, there are an estimated 800,000 H-1B visa workers in the US, according to an ABC news story covering the Disney layoff lawsuits.


Ask any IT worker who has been laid off (sometimes multiple times) in the last 10 years, and you will get a passionate (and likely profane) take on the reported IT skills shortage.


Microsoft has laid off over 18,000 people over the last two years. Cisco laid off 6,000 workers in 2014. Citrix laid off 700 full-time employees and 200 contractors last year. Qualcomm: 4,700 laid off in 2015. IBM has eliminated tens of thousands of jobs over the last ten years. And HP has shed somewhere between 55,000 and 80,000 employees since 2012, depending on which source you consult.


And the list of tech company layoffs continues to grow every year.


Obviously, not all of these workers are IT professionals. But it is difficult to buy into the reports of an IT worker shortage in the face of massive layoffs by some of the world's largest technology companies.


Here is a more blatant example of the corporate-fueled IT shortage hype. In June 2015, a Washington lobbyist for Qualcomm (of the 4,700 layoffs last year) called for the cap on H-1B visas to be raised so the company could fill its need for more engineers.


"Although our industry and other high-tech industries have grown exponentially," she said, "our immigration system has failed to keep pace." Just a few weeks later, Qualcomm announced a 15 percent cut to its workforce — over half of which is made up of engineers.


Qualcomm isn't alone. All of the tech companies previously mentioned in the layoff parade continue to lobby Washington to make more H-1B visas available. And yet, reports indicate that 50 percent of all H-1B visas granted in a given year are going directly to foreign outsourcing firms, which then use them to import workers into American mid-level IT jobs which have been vacated by layoffs. The H-1B system is being played by companies that use it to cut payrolls and reduce benefit costs.


There is some hope for reform of the H-1B program. As more attention is paid to incidents like those at Disney and Qualcomm, more politicians may feel pressured to respond — contrary to the wishes of paid lobbyists — and finally pass legislation that fixes the current program. The H-1B visa system doesn't need to be gutted; it just needs to be repaired so that it does what it was created to do: help companies find candidates for hard-to-fill specialized job roles. H-1B shouldn't be primarily used as a loophole for the import of cheap labor.


Would you like more insight into the history of hacking? Check out Calvin's other articles about historical hackery:
About the Author
Aaron Axline is a freelance technology writer based in Canada.

Aaron Axline is a technology journalist and copywriter based in Edmonton, Canada. He can be found on LinkedIn, and anywhere fine coffee is served.