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IBM IT News

Hertz Is Pulling a Disney 420

New submitter wcrowe writes: Hertz is laying off over 200 IT employees, outsourcing the work to IBM India Private Limited, which has filed paperwork for H1-B visas to bring in replacements from overseas. This sounds pretty similar to what Disney did a year ago.
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Hertz Is Pulling a Disney

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  • by superdave80 ( 1226592 ) on Saturday February 13, 2016 @12:55PM (#51500651)
    I thought the whole point of H1-Bs was to fill jobs that they couldn't find qualified applicants for? But now they are firing (excuse me, 'laying off') the workers, then turning around and claiming they need to import people? If this doesn't get rid of the excuses for the H1-B program, NOTHING will...
    • Nothing? (Score:5, Insightful)

      by AmazingRuss ( 555076 ) on Saturday February 13, 2016 @01:02PM (#51500693)

      How about a few hundred mil in "campaign contributions"?

      • It's probably not even one hundred million. I've seen politicians take a firm stance and vote for or against legislation with only a few thousand dollars in contribution on the table.

        A lot of things happen for not a lot of money,

    • by fahrbot-bot ( 874524 ) on Saturday February 13, 2016 @01:03PM (#51500703)

      I thought the whole point of H1-Bs was to fill jobs that they couldn't find qualified applicants for? But now they are firing (excuse me, 'laying off') the workers, then turning around and claiming they need to import people? If this doesn't get rid of the excuses for the H1-B program, NOTHING will...

      I think what companies like this do is redefine the job so their current workers are "no longer qualified", then refuse to "retrain" them, then *have* to fill those positions with H1-B people 'cause, you know, they can't find qualified US workers. Moral? No. Currently, barely legal? Seems so.

      Blame Congress for listening to companies clamoring for more H1-B visas. Then blame ourselves for electing those in Congress.

      • by AF_Cheddar_Head ( 1186601 ) on Saturday February 13, 2016 @01:12PM (#51500747)

        The current workers won't take a 50% pay cut and we can't find qualified workers for what we are now offering so we need to fill the positions with H1-B visa holding workers.

      • by Teun ( 17872 )
        And blame yourself and many others for allowing the rich to be over-represented with their political donations.
        That and the corporation = a person are at significant contributors to your political problems.
    • It is, and the Department of Labor could put a quick halt to this, along with the Department of Justice. But they won't, because they have all been bought out. The POTUS doesn't even need Congress to instigate an investigation; this could be handled by the Executive Branch. Yet the stock holders only want profit, they care nothing about their fellow citizens. To them, we are not really "fellow citizens" but mere serfs who are allowed to think we matter.
    • Re: (Score:2, Interesting)

      by Anonymous Coward

      No, the point of H-1B is to replace high salary US employees with cheaper labor. Normally H-1Bs have to be paid the "prevailing wage" UNLESS they are paid at least $60k per year...that last part is what makes it so attractive to bean counters.

      • by Z00L00K ( 682162 )

        Or just make sure that H-1B is only given to people that have the same salary level as in the US when they are in their home country. It would shorten the list of countries where the people are eligible for that visa to a quite short list essentially only make it worthwhile to offer that visa to specialists.

    • by gstoddart ( 321705 ) on Saturday February 13, 2016 @02:23PM (#51501143) Homepage

      I thought the whole point of H1-Bs was to fill jobs that they couldn't find qualified applicants for?

      That's just what they told everybody to get it in the door.

      It's really about enriching companies by allowing them to undermine the labor market.

      This is all about maximizing shareholder value, and fuck the people who actually live in your country ... unless they're willing to compete for wages with people from India that is.

      Welcome to the race to the bottom. The only winners are the corporations.

    • by Kohath ( 38547 )

      Why should they? What are voters going to do? Start voting based on economic policy?

  • by shubus ( 1382007 ) on Saturday February 13, 2016 @12:58PM (#51500671)
    This H1-B visa is being vastly abused by big companies. Time for congress to step back and rethink.
  • by penguinoid ( 724646 ) on Saturday February 13, 2016 @12:59PM (#51500675) Homepage Journal

    This sort of thing is happening at too high a frequency.

  • by Lumpy ( 12016 ) on Saturday February 13, 2016 @01:01PM (#51500687) Homepage

    And the Democrats as well....

    All of those assholes in washington keep allowing this to happen. Until we get representation for the people and not the corporations, it will only get worse.

  • Or for Republicans, for that matter.

    It does not matter how you vote, but every time elected are the clowns who promise free stuff (be it Obamacare, free education, free phones, free house, free security), that free stuff needs to be taken in the form of taxes, fees or higher fees from artificial monopolies, from somebody.

    Sooner or later those evil entrepreneurs will re-run the numbers and will pluck the plug.

    The cries of dissatisfaction for migrating the jobs are only from the ignorant ones. All large corpo

    • Haven't you noticed that when you call Citi, Microsoft, or HP, for support, your representative "Jessica" after some questions tells about nice weather in Jaipur, and lovely "Ben" is from Bangalore working his first hour on his shift.

      And, you see, I don't have a problem with this.

      If I want to outsource work to people working overseas (in environments with a lower cost of living) and I'm willing to put up with the hassles of dealing with people on the other side of the planet, that's a legitimate choice for a company to make. If I call phone support, I'm looking to get assistance with a problem and if they can help me, it doesn't matter if they're in sunny California or rainy Manila.

      Where I have an issue is that the jobs aren't moving--

  • Clinton vs Sanders (Score:5, Insightful)

    by ohnocitizen ( 1951674 ) on Saturday February 13, 2016 @01:06PM (#51500715)
    Sanders wants to raise the salaries of H1B workers. Which would lessen stories like these, and reduce them to situations in which you truly can only find the person you want overseas (and make sure they get paid a fair rate).

    Clinton wants to raise the cap and allow more stories like this to happen.

    This isn't just a Republican/Democrat debate, it's a more complex split.
    • it might give us a few years of relief, but it won't work in the long run. You could make the base pay 8x the going rate for a tech and it wouldn't help because sooner or later Sanders will be out of office and the "going rate" will be defined as whatever it takes to get around the rules. It's like Wargames. The only way to win is not to play.
    • by Kohath ( 38547 )

      Either of them would have to work with a Republican Congress to get anything done. Who thinks one of them can? Which one?

      • by AK Marc ( 707885 )
        Neither. But Bernie would push Congress, and when they don't respond, the midterm elections will clean house. Hillary won't stir up Congress. Bernie would actually get more done than Hillary.
    • by AmiMoJo ( 196126 )

      Raise the salaries and require the company to pay for an American citizen to train. That was the proposal in the UK, but it got watered down to nothing.

  • That movie comes to mind. Soon these CIOs, CEOs, etc will be targeted directly themselves by angry workers. They will have a whole new concept to the idea of "getting fired".
  • by Rick Zeman ( 15628 ) on Saturday February 13, 2016 @01:28PM (#51500865)

    Every American IT worker should boycott Hertz in solidarity and trash them online whenever possible.

    • by Kohath ( 38547 )

      Hertz is already doing pretty bad. Uber and Lyft are a huge problem for the rental car companies. And Hertz in particular has accounting irregularities [wsj.com]. They're going to have to redo the last 5 years of their financials.

      Their only saving grace is that car rental has become an oligopoly [thetruthaboutcars.com]. The Obama Administration allowed Avis to merge with Budget and Hertz to merge with Dollar/Thrifty. Avis also bought Zipcar. The other company in the 3-way oligopoly is Enterprise/National. Car rental pricing has been a

    • by creimer ( 824291 )
      Every American worker should boycott Disney in solidarity — after Star Wars leave the theaters and becomes available online.
  • by wonkavader ( 605434 ) on Saturday February 13, 2016 @01:37PM (#51500917)

    The article has some small, honest mistakes. The paragraphs:

    Hertz is trying to improve its IT operations. It hired a new CIO last year with experience in the car rental industry, Tyler Best.

    The firm seeks a "transformative IT agenda," said Hertz CEO John Tague, in a conference call with analysts last year, according to a transcript at Seeking Alpha.

    Tom Kennedy, Hertz CFO, told analysts in an earning call last year that "we have 1,500 people in the back office, which is quite double what it should be. Our call centers are probably double what they should be," according to the Seeking Alpha transcript. He said the firm's IT spend is over $400 million a year.

    should actually read

    Hertz is sacrificing customer service for short-term profits. It hired a new CIO last year with experience in the car rental industry, Tyler Best.

    The firm seeks a "seppuku IT agenda," said Hertz CEO John Tague, in a conference call with analysts last year, according to a transcript at Seeking Alpha.

    Tom Kennedy, Hertz CFO, told analysts in an earning call last year that "we have 1,500 people in the back office. We can reduce that by 750 people by eliminating time spent actually doing things. We need to completely change that to people filling out forms to get IBM to do things for us vastly slower and for vastly higher costs. Ideally, once this is done, our change control costs will drop because nothing will ever get done. Our call centers are probably double what they should be -- having enough staff to serve customers is so 1990," according to the Seeking Alpha transcript. He said the firm's IT spend is over $400 million a year. "Tyler and I should be able to get at least a few million of that as a kickback from IBM, once we're parachuted out for destroying the company."

  • by retroworks ( 652802 ) on Saturday February 13, 2016 @01:54PM (#51501005) Homepage Journal

    I realize this is a News for Nerds site, and many nerds fear losing their jobs in the short term to places like India. But 15 years ago /. used to have a lot more vocal free trade thinkers. The concept is that India gets richer, China gets richer, and that leads to peace and more net jobs (for example, Hollywood movies earn much higher international sales, USA chicken and corn exports go through the roof, Buick triples its exports). If this makes Hertz rentals cheaper, that income goes to something else in the USA, probably.

    I explain it to my kids this way. Your cell phone was assembled by Taiwanese owned companies in China. That alone 1) reduces chance of war between China and Taiwan, and 2) reduces the cost of your cell phone by 400%, so 3) Chinese people can now afford to buy the cell phones, and 4) the cost of the cell phone falls another 400% because of scale of manufacture (as Chinese can now afford them). Would you rather live in a USA where the cell phones are assembled in California and cost $8000 and the Chinese are working in rice fields? Sacrificing the 1000 California assembly line jobs creates about 10,000 Chinese jobs (from the increased production due to cheaper phones) and creates programming jobs for cell phones - in California.

    The same people who got alarmed by outsourced phone assembly jobs now express alarm about the programming jobs. And they sound like the same people who were alarmed in the 1970s when Hertz started buying more Japanese cars, so the cost of cars went down and the quality came up and Japan became wealthy and peaceful and eventually opened Toyota and Honda factories in the USA.

    Trump says China and Mexico stole your jobs, Bernie says corporations sent your jobs to China and Mexico. They are both old enough to remember how utterly stupid the anti-Japanese-car kerfluffle turned out to be, shame on both.

    • reduces the cost of your cell phone by 400%

      Marvelous. When can I expect their check?

    • by kuzb ( 724081 )

      Yeah. More jobs. Just not for you, or your kids.

    • You missed the elephant in the room. What maintains peace? Among other things, a populace who is otherwise engaged in things that keep them from thinking about war. Namely, having a job, food on the table, a home, and the levels of property and prosperity that their particular culture or society has decided are normal.

      For Americans, this is something like mom and dad both educated and employed in good jobs with decent benefits, and they own a house in the suburbs stocked with the latest gadgets and plenty

    • The concept is that India gets richer, China gets richer, and that leads to peace and more net jobs (for example, Hollywood movies earn much higher international sales

      Okay, I'll bite.

      Economists tout free trade as benefiting everyone because of rationalizations and predictions. There's no strict math involved, and it is based on flawed assumptions.

      In the case of recent outsourcing, two decades ago the populists pointed out that domestic salaries would stay flat or go down.

      Economists agreed, but pointed out that because the imported goods would be much cheaper, your purchasing power would actually go up.

      And now we see that this actually happened: salaries have largely stag

      • Economists tout free trade as benefiting everyone because of rationalizations and predictions. There's no strict math involved, and it is based on flawed assumptions.

        I predict that economists will get their dander up and respond with "Nuh-uh!", so here's a challenge.

        Without appealing to the argument of "current school of thought holds that...", answer the following questions:

        1) What is the right formula for calculating inflation?
        2) What's the right value of inflation to have?
        3) How important is it to hit this value exactly (ie - is it catastrophic or minor to be off by a percent?)

        If you say you can't give a numerical value because "it depends", or "it's complicated", th

    • To me there's a difference between outsourcing and what we see here.

      I don't have a problem with outsourcing. Sending work to India, China, Cleveland, or places with a lower cost of living where you don't have to pay people quite so much to get a job done is perfectly legitimate. Heck, IBM used to have lots of R&D-type offices in inexpensive places. This way they didn't have to pay people a lot of money but those employees could buy a nice house in that inexpensive area. There are advantages to doing

    • The global free market equalises. If you've got a region of very high wages, and a region of very low wages, and you allow jobs to suddenly travel freely - then soon trade occurs and the market starts to correct the discrepancy. This is a great thing from the perspective of all mankind as a collective - but it is not so great if you happen to live in one of those regions of very high wages and find your job has relocated to Bangladesh.

  • by rsilvergun ( 571051 ) on Saturday February 13, 2016 @02:02PM (#51501051)
    who doesn't think H1-B hurts them? Oh, and doesn't have a sweet gov't job (either directly or because they served in the Military & work for a defense contractor now).

    I'm curious. Not too long ago when a story like this hit all the posts chimed in about how they'd just leave and go to another better paying company that doesn't do this stuff. Nobody thought it would even catch up with them and they all thought they were irreplaceable. Me being me I knew sooner or later they'd get around to everybody except a few MIT geniuses (who have better things to do than bitch on /.).

    Basically, I think the /. crowd has finally realized their in real trouble here. We're all in the same stop the blue collar guys were in the 80s when manufacturing went overseas. What I'm wondering is if we're gonna do anything about it? Or are we gonna roll over and play dead like the blues did.
  • I thought it was illegal to replace workers for a specified period of time after a layoff. For example, If I lay off Joan the Accountant, I can't hire another accountant to take her place for a fixed period unless I specifically offer the job back to Joan first.

    Is my understanding of labor law incorrect?

    • I'm sure there are many lawyers making sure this works - but at a guess, those workers weren't actually replaced. Their job was instead outsourced to another company, that hired new workers on H1-B visas. Different company, different contract.

      It's not uncommon. You should see the tangle that is Ark Experience, the creationist theme park - they've structured it in a manner that might be termed 'tax efficient.' Employees are actually under contract with a church in order to avoid state non-discrimination laws

  • by rbrander ( 73222 ) on Saturday February 13, 2016 @02:47PM (#51501243) Homepage

    People are arguing this as if it's a political football and furcrissakes turning it into capitalism-vs-communism.

    It's about trade vs profession.

    This isn't a serious problem with doctors, dentists, lawyers, accountants, or teachers. Why? They're real professions, licensed by the local state. This isn't an inherent barrier to foreigners - if they meet the qualifications, it's a fraction of a year's effort and pay to get certified - but it's a huge barrier to the underqualified.

    The hirers here are hoping that (a) the new-hires can pick it up well enough that with a few extra staff (and still cheaper) they can keep up production and (b) that the cracks won't show until they're on to their next promotion.

    IT needs to be a Real Profession for about six reasons, but as a side-effect, it would end this continual pressure downward on the salaries of everybody in the industry by various efforts to dilute the talent pool with poorly-qualified competitors. Hiring kids away from college is another.

    Just about anybody used to be able to hang out a shingle and be a dentist or doctor; engineering was a trade you picked up on the job working under a builder. Anybody want to go back to that? If not, support professionalising IT.

    • by swb ( 14022 )

      Medicine is full of foreigners who manage to get some kind of accreditation to practice in the US. I've been to urgent care offices in Minnesota and had doctors with accents so thick I could hardly understand them. Obviously they are here and working the Wal Mart of medicine because they are cheaper than some American educated doctor.

      And what you're really asking is for is trade unionism in IT, because that's what licensed professional associations end up being without being called trade unions. They use

    • by guruevi ( 827432 )

      a) You haven't been to a hospital recently. I randomly googled lists of doctors' names: http://www.healthgrades.com/ho... [healthgrades.com] It is hard for foreign doctors to get accredited though, often they will have to take courses for US-specific stuff.
      b) Many people don't like life-event specialists that aren't 'similar' to themselves. Therefore, a lot of doctors etc. will remain natives. IT professionals are considered to be the plumbers of electronics, not the doctors.

      You're right though, this is very short term thinki

  • https://s-media-cache-ak0.pinimg.com/736x/eb/20/e3/eb20e3369cdd65c9bf54736294b98fc2.jpg

    (Uranus-Hertz)

  • Microsoft has laid off US workers by the thousands, while simultaneous sitting before congress and insisting more offshore visa workers were needed to make up for "sever shortages" of US workers. Microsoft probably has tens of thousands of visa workers in the US, and it's been going on for decades.

    The number of US workers hired by IBM fell every years. Finally the number of US workers at IBM dropped below 25%, and IBM stopped publishing the numbers.

    Many other US tech companies have been replacing US workers

  • by Gravis Zero ( 934156 ) on Saturday February 13, 2016 @08:01PM (#51503007)

    capitalism is the continuous cycle of optimization resulting in a survival of the fittest situation for businesses with the most fit being fully automated. outsourcing to a country with lower wages is simply an optimization. the question is how long we can sustain an economy by using such practices before it either collapses or a secondary post-scarcity economy springs up.

  • by MtViewGuy ( 197597 ) on Sunday February 14, 2016 @10:41AM (#51505793)

    _American business tax laws actually encourage this type of activity_.

    Why do you think Ford and just recently Carrier decided to move thousands of jobs to Mexico? Or the fact here in the USA, the states with the lowest tax burden are attracting many thousands of jobs? Or why in their (in my humble opinion) insanity in raising business income taxes, the state of Connecticut is losing thousands of jobs (GE just announced they're moving a lot of their operations out of the state)? Or why Apple has 70% of its $218 billion liquid asset hoard sitting in non-US banks? Or why American tech companies engage in that highly complex "Double Irish with Dutch Sandwich" accounting scheme to substantially lower their tax burden for European operations?

    That's why I strongly support radical tax reform in the USA _so it encourages savings and capital formation staying in the country_. Business income should be taxed at a no-loophole flat rate of around 12%, which would make it among the lowest business tax rates on Earth and because the taxation is simple, save hundreds of billions per year in compliance costs, which could encourage businesses to far less likely export jobs for tax reasons.

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