Pfizer's outsourcing contract with Infosys Technologies and Satyam Computer Services means job losses for IT workers in Connecticut. Many U.S.-based contractors are complaining that they are being asked to train H-1B workers who will soon replace them.
Pfizer is taking flak for what
detractors charge is a plan to use U.S.
workers to train the foreign contractors that will replace them during a years-long
Contractors in the company's Groton and New
London, Conn., R&D
facilities-many of whom are either former full-time staffers or replaced
Connecticut-based staff-are complaining that foreign workers on H-1B visas are
coming in to be trained on the company's systems, according to local
newspaper The Day.
The complaints about IT
contractors are part of a larger swell of discontent focused on Procedure 117, a
policy Pfizer instituted in January that requires the closure of even long-term
contractor arrangements as those terms expire. It also institutes conditions-and
some say harsh ones-on which contractors in IT and other specialties may or may
not be able to continue to work with Pfizer.
Sen. Chris Dodd, D-Conn., and U.S. Rep. Joe Courtney, D-2nd District, who
represent the region, sent a letter to Pfizer asking the company to reconsider
laying off U.S.-based workers in Connecticut.
The situation, as reported by The
Day, is unpleasant for U.S.-based IT workers, but not terribly unusual for
companies shifting IT operations overseas during major outsourcing deals.
Calls to Pfizer requesting
confirmation or comment were not returned. In a public statement the company
said it was continuing to evolve IT operations "to
meet global business challenges and look for efficiencies to help better manage
operations, which include the use of contract workers on an as-needed basis."
circulated an internal memo in 2005 saying it would try to cut $4 billion from
its annual operating costs by 2008, largely by moving IT and other operations
from the United States and Europe to
countries with lower costs of living.
The memo, entitled "Evaluating Options: Moving IT Services to Low-Cost
Locations," outlined a plan to shift much of the company's IT operations
to Indian IT services firms Infosys and Satyam.
It's not illegal for companies
to bring in H-1B workers for training, even if they're there to learn how to
workers, according to Ron
Hira, assistant professor of public policy at Rochester Institute of
Technology and co-author of "Outsourcing America."
"It's not surprising to
have a company bring in [workers on] H-1B or L-1 visas to transition that work
to companies like Infosys and Satya, which are classified as H-1B-dependent
because more than 15 percent of their work forces here are on visas," Hira
said. "Still, you shouldn't have to dig your own grave by bringing in
someone on an H-1B and training them to do your job."
Pfizer has between 800 and
1,000 contractors working in Groton and New
London on any given day, alongside about 4,500
full-time workers, according to The Day.
The IT outsourcing contract is
only one part of Pfizer's overall outsourcing and reorganization plan, which
much of its manufacturing and raw-material production and acquisition. Pfizer
cut more than 11,000 jobs in 2007 and closed a number of factories in an
attempt to save $2 billion in operating costs, according to Bloomberg News.
Much of the reconsolidation was
sparked by the approaching end of the patent and exclusive-manufacturing rights
to anti-cholesterol drug Lipitor and negative publicity about the effects of
its anti-smoking drug Chantix. The two are among the company's most profitable
Pfizer, the world's largest
drug maker, announced in October that its third-quarter net income had risen to
$2.28 billion compared with $761 million in 2007, when it took a $2.8 billion
charge for the failed development of an inhalant version of insulin. The
company said cost-cutting played a major role in improving its net income
during the quarter.