AT&T is engaged in sweeping layoffs, according to a new report from Axios, which also suggested that the telecom giant is engaged in significant outsourcing.
“AT&T is poised to send thousands into the new year hunting for new jobs after assigning them to train their own foreign replacements,” Axios wrote, based on documents and firsthand conversations with laid-off workers. “They aren’t being offered severance or early retirement, and may not easily find a comparable job elsewhere with similar pay.”
AT&T has business-services contracts with IBM, Tech Mahindra, and other firms, all of which provide contractors who can take the place of full-time workers. “We are continuously working to be more efficient in our operations,” an AT&T spokesperson told Axios, although the company refused to confirm or deny exactly how many positions it had outsourced to contracting firms.
Trading full-time employees for contractors is a practice under severe scrutiny at the moment, especially within the context of the H-1B visa program, which critics suggest is being used by companies across the country to import cheaper labor. Professional consulting and business-services firms that petition for numerous H-1B visas every year are finding an increasing number of their applications either forced into review or denied.
Indeed, a recent analysis by the National Foundation for American Policy (NFAP) of U.S. Citizenship and Immigration Services (USCIS) data noted that denial rates for H-1B petitions had skyrocketed to 24 percent through the third quarter of fiscal year 2019.
“At least 12 companies that provide professional or IT services to other U.S. companies, including Accenture, Capgemini and others, had denial rates over 30 percent through the first three quarters of FY 2019,” the report (PDF) added. “Most of these companies had denial rates between 2 percent and 7 percent as recently as FY 2015.”
Just look at the spikes in this chart:
Many companies have responded to these restrictions by outsourcing jobs and opening offices in other countries, including Canada. “I was a serial entrepreneur and I spent most of my career watching a brain drain from Canada,” Yung Wu, the CEO of Toronto-based MaRS Discovery District, a tech-innovation hub for startups, told Vox earlier this year. “This is the first time in my career I’ve seen a brain gain.”
In a statement to Mother Jones, a USCIS spokesman suggested that the agency’s crackdowns were “designed to protect U.S. workers, cut down on frivolous petitions, strengthen the transparency of employment-based visa programs, and improve the integrity of the immigration petition process.”
But those changes to the H-1B and other visa programs (for example, the federal government’s efforts to kill the H-4 EAD are rolling forward, despite some recent court battles) clearly haven’t stopped many companies from continuing to petition for the visa, as well as outsource at least some of their employees.