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IT layoffs at insurance firm are a 'never-ending funeral'

Patrick Thibodeau | June 1, 2016
Workers train replacements as some IT duties shift overseas

MassMutual says it is "growing and hiring," and the effected IT employees can apply for other jobs at the company. Employees say that there is little expectation that many will find other jobs at MassMutual, or that those rebadged to Cognizant will become long-term employees of Cognizant. MassMutual laid off 360 employees earlier in the year.

Employees believe the motivation for outsourcing IT services is cost savings. MassMutual ended 2015 reporting sales of whole life insurance up 15% from the prior year, "the 10th consecutive year of record results." The firm's CEO, Roger Crandall, received a 21% raise last year to nearly $12 million, reported The Boston Globe.

In the absence of action by Congress to the use of visa workers in offshore outsourcing engagements, multiple lawsuits have been filed challenging the use of foreign workers to displace U.S. workers.

Blackwell has embarked on one such effort. She is representing Walt Disney Parks & Resort IT employees who have filed lawsuits against the contractors there, which includes Cognizant. Some 250 IT employees at Disney were displaced last year.

The lawsuits allege that Disney and the contractors engaged in a "conspiracy to displace U.S. workers" with foreign visa-holding workers and makes it claims under the Federal Racketeer Influenced and Corrupt Organizations Act (RICO).

Disney, in a motion for dismissal recently filed in federal court in Tampa, Fla., said the goal was to transition its "IT department from one concentrated on maintaining existing IT systems to one more focused on developing new technologies" and denies that there was anything unlawful. It argues that the allegations of conspiracy are unsupported, and what occurred was an ordinary business arrangement. Cognizant has filed a motion for dismissal as well. These motions are pending.

Blackwell sent the company a letter, on behalf of an organization she heads called Protecting U.S. Workers, attempting to dissuade MassMutual from its course of action. It did not respond to her letter. Blackwell wrote, in part, "Come out as an American insurance company who stands with the Americans, not against them."

 

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