The recent situation with EmblemHealth is a common event in modern times that could also affect it outsourcing Toronto workers. On Tuesday the company issued 250 notices to staff members that they were being laid off. IT asset and inventory management tools the work will be outsourced to the managed services provider Edmonton. Such situations are quite common today as companies try to cut costs and are wary after the global recession of the late 2000s.
The layoff notice resulted in around 25 of the company’s IT employees protesting outside the office of the insurer in New York. They shouted that the company should protect US jobs. They also shouted that their jobs were being lost now, but their jobs would be next.
The workers had taken various steps to stop the layoffs that were bound to happen. However, the company’s CEO Karen Ignagni argued that outsourcing the work was needed in order to modernize the company’s future.
In a video that featured the CEO’s announcement she shared that the move to make the company more modernized would require less staffing than the amount used during the old system. She said that the company realized that building its own tech would cost hundreds of millions of dollars and also require amounts of time that the company could not spare.
Cognizant is one of the biggest users of H-1B employees. It will reportedly offer a certain number of jobs to laid-off workers. However, there is no guarantee that it will offer long-term employment.
In fact, there I a big debate in the US about shipping IT jobs abroad, as well as companies using H-1B visas. It’s become a hot issue during the past year. For example, last summer, Edison workers in Southern California complained that over 500 of them had been laid off when the company hired cheaper H-1B employees from foreign countries.
In fact, ex Disney workers say they experienced the same situation after 250 workers were laid off late during 2014 and replaced with workers from an Indian outsourcing company.
However, several companies are having problems competing in the industry so they’re trying to find ways to save money. HP executives argued that it was required to move part of its workforce abroad in order to survive. It said the move would help to lower /control its operating costs. This happened before the company split into 2 companies and after it made the announcement that it was cutting 30,000 jobs.
In the meantime, the demand for H1-B visas is the highest it’s ever been. The particular agency that processes H1-B requests has recently announced that it already hit the 85,000 petition cap in only five days. It will thus award visas using a lottery system.
During Q1 restructured deals resulted in a steep increase in funds spent on IT as well as business process outsourcing (BPO) in regions including Europe, the Middle East, and Africa during Q1 of 2016. During that period there was a 91% spike in restructuring contracts. This suggests that tech systems still have a positive effect in several areas, as large amounts of work are moved to cloud.