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(Formerly Known As "The Intel Eliminati" - TIE)

Saturday, May 26, 2018

The Federal Government is Investigating Intel Corp.
for Age Discrimination Violations

Recently published articles in the Wall Street Journal and the Oregonian web site, report that the Equal Employment Opportunity Commission (EEOC) is conducting an expanded class-level investigation regarding age discrimination complaints that have been filed with the EEOC against Intel Corp.

The Wall Street Journal (WSJ) was the first news organization to report about the ongoing investigation in an article written by Georgia Wells, entitled: Intel Faces Age-Discrimination Claims. The WSJ article mentions that multiple complaints have been filed with the EEOC in conjunction with several rounds of massive employee layoffs over the last three years. The fact that the EEOC would continue an investigation almost three years after a reported violation indicates that the reported allegations are substantial, in spite of Intel Corp. denial of the charges.

The Oregonian news organization expands the coverage on the subject matter in an article written by Mike Rogoway entitled: Intel under investigation for alleged age discrimination. Rogoway, who covered the Intel Corp. massive employee layoffs back in 2015 and 2016 also provided statistical charts showing a clear correlation between an employee age and their odds of being selected for layoff. In this recent article, Rogoway provides a copy of a previously published chart from 2016, demonstrating the very clear age discrimination factor in the 2016 layoffs. Similar charts are available for the 2015 layoffs.

Intel Corp. 2015 Layoffs (click on image to enlarge)

Intel 2016 Layoffs (click on image to enlarge)

Publicly available information also demonstrates that while Intel Corp. was laying off thousands of its current employees, the company was actually acquiring new employees by the thousands. Many of these employees came in via Intel corp. sponsorship of H1B visas, H4 spousal work visas, "Green Card" sponsorship and F1 to OPT work permits. All of these additions to the workforce involve importation of foreign workers who are at the mercy of Intel Corp. for continued stay and employment in the U.S. In other words, Intel Corp. was actively replacing older workers with imported slave labor.

Intel Corp. Number of employees from Annual Report
(click on image to enlarge detail)

As can be seen from the above information, taken from the Intel Corp. 2016 Annual Report, The number of employees reported at the end of 2015 was 107,300, or about 600 more employees then reported in the previous year. However, since about 1200 employees were laid off mid-year, in July 2015, the the end-of-year number shown in the Annual Report actually represents a gain of 1800 employees relative to the previous year. This gain of 1800 new employees acquired before 2015 year end, contradicts Intel CEO's announcement to employees that the July 2015 were necessary to save on expenses "due to forecast of flat revenue"! Throwing experienced (and older) employees off the bus in order to replace them with cheaper newcomers, is the more likely explanation.

Similarly, in 2016, Intel Corp. laid off about 12,000 employees, yet the difference between the numbers reported for the end of 2016 are 106,00, thereby reflecting an effective gain of 10,700 employees  (106,000 - (107,300 - 12,000)) = 10,700.

Where did Intel Corp. acquire the replacement employees? According to a recently published Pew Research Center report: "By the end of the 2004-2016 period,  there were a total of 1,474,000 OPT approvals and 1,473,000 initial H-1B visa approvals".

Layoffs of older U.S. citizen employees not only manifests employment costs savings due their higher salaries, but also cuts on the cost of medical insurance expenses for a self insured company like Intel Corp. It is taken for granted that medical insurance costs tend to rise with the age of older employees and their dependents. If induction into employment of almost 3 million imported slave laborers in the high tech sector is not a significant economic factor in this lucrative sector of the U.S. labor market, what is? 

Intel Corp. attitude towards lowering the cost of labor led company management to commit law violations by conspiring, along with Apple, Adobe and Google to halt competition for employee recruitment in the Bay area and by doing so curbing potential employee pay escalation. The company was engaged in this practice for over a decade since 2001. Court records show that Intel Corp. was forced to settle its ill behavior with its employees, following a court ruling in 2013 (see United States District Court of Southern California - San Jose, Case No. 11-CV-02509-LHK).

Taking the significant risk of engaging in an anti-competitive illegal activity is a clear indication of the high priority that  company executives and the board of directors gave to curbing payroll costs. Clearly, Intel Corp. never refrained from its quest to curb employee compensation and was looking for every avenue to achieve its goals. The evidence points to systemic changes in the company's HR practices, enacted by company executives to get rid of older workers and replace them with cheaper workers. The 2015 layoffs, in which about 1200 employees lost their jobs, seem to be a small scale "experiment" that was meant to serve as a learning tool for company executives before executing the "magnum opus", the massive layoffs of 2016.

While Intel Corp. is not the only company to utilize the F1 to OPT loophole to circumvent the H1B visa quotas, utilization of such loophole is certainly one of the tools that the company utilizes to recruit cheap, captive workers. Public records show that Intel Corp. was the number one company to sponsor F1 to OPT foreign worker visas, with twice as many records registered as Microsoft corp. (see chart below).

Click on image to enlarge detail

Both the WSJ and the Oregonian articles provide new exposure to issues that we have been covering in this web site for the last two years. We encourage our readers to refer to several of our previously published articles, including:
Further recent information regarding the ill practices that high tech employers are using to substitute older workers with cheaper workforce are covered by Peter Gosselin in these ProPublica articles:

All the best.


Sunday, May 13, 2018

The Cheap Labor Loophole
OPT is the Name of the Game

Over the last three years I have been looking at the systemic abuses of F1 visa to OPT conversions. OPT, which euphemistically stands for "Optional Practical Training" is one of the major loopholes that large tech employers are using to circumvent the H1B visa caps while recruiting cheap and captive foreign workers residing within the United States. This loophole facilitates major layoffs of older (and more expensive) domestic employees and subsequently, replacement of these employees with cheap (entry level) foreign employees, using the OPT program for stay/work visa extensions.

Recently, the Pew Research Center published a comprehensive report on the subject of F1 to OPT visa conversion program. This program, driven mostly through the lobbying efforts of large High-tech employers continues to increase in size, completely unchecked.  The Mercury News outlet published a summary of this report in the latter part of this week. As you can see from the article referenced below and the PEW Research Center report, taking advantage of the OPT loophole, has become a standard operating procedure for many high-tech companies. The number of F1 (student visa) holders converted to OPT has grown 400% between 2008 and 2016, as shown in the chart below.

Click on the image to enlarge detail

Note that foreign workers who remain in the U.S. under the OPT program, are effectively, "indebted workers". They are being paid low wages and they are totally dependent on the graces of their employer, to maintain their residence and work permit. This makes them "ideal" target for exploitation. Employers would simply be "stupid" to not take advantage of this loophole to reduce the cost of labor. In the meantime, older domestic workers continue to be laid-off in droves.

Click on the image to enlarge detail

As can be seen from the chart above, Intel Corp. is one of the top companies taking extensive advantage of the F1 visa to OPT conversion loophole. Actually, as the chart above shows, Intel Corp. is No. 1 on the chart, leading all the employers listed above, including Microsoft Corp.

Without a doubt there is a price to pay when a company only focuses on cutting expenses and gets rid of its more experienced (however, more expensive) workers. In the case of Intel Corp. there is no reason to guess where this executive management policy fails. The writing is on the wall for Intel Corp. has been there since the 2015 mass layoff. Recent news about the 10 nm production line failures (see references below) serve as indicators of much more substantial problems to come. The company's ability to execute has diminished significantly, following the 2015 and 2016 massive employee layoffs.

The Mercury News outlet covered the OPT stay/work visa conversions loophole in a recent article, which is mostly based of the Pew Research Center report.

This is a quote from the Mercury News article referenced below:

OPT has caught the attention of critics pushing for reduced immigration. John Miano, a fellow at the Center for Immigration Studies, called the 2008 STEM extension a “scheme” by Microsoft to “circumvent the H-1B quotas.” The program started out giving work-experience opportunities to foreign students but has since been “transformed into a full-blown guestworker program whose stated purpose is to provide labor to American business,” Miano wrote in a September blog post for the center

Click on the image to enlarge detail

Clearly, the numbers shown on the map above speak for themselves. It is difficult to come to any other conclusion other than that the OPT program is pandering to the interests of high tech employers, by supplying access to cheap foreign labor, at the expense of domestic workers.

The Pro Publica article: CUTTING ‘OLD HEADS’ AT IBM, covers the multitude of ways in which older employees in the high-tech sector are loosing their jobs to foreign workers, through a variety of legal loopholes and shenanigans committed by Corporate America.   

When we examine the growing trends in the high tech industrial sector, of laying off older employees and replacing them with cheap and indebted guest workers, it seems that the OPT program lost its original purpose and de facto, under the intense lobbying of big business, was transformed into a U.S. Government sponsored, older worker mass displacement program!

--Dr. Flywheel