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| Walt Disney Company photo advertisement |
Controversy
The Walt Disney Company has been in the news lately but not as one would expect. Disney has been accused of acting ethically wrong in regards to the layoff that occurred in January of 2015. Disney decided to lay off two hundred and fifty data technicians who worked at The Walt Disney Company location in Florida due to reorganization of the company. But in actuality they decided to terminate the employees so they can save money in the long run. Not only were these employees let go without proper justification, they were also told in order to receive their severance pay they were required to train their replacements, which were visa workers from India that are part of the H-1B program.
The H-1B program was created in 1990 to allow U.S. employers to hire temporary foreign workers with a bachelor's degree in advanced science, engineering, or computer skills to fill positions when American workers with those skills cannot be found. Disney is required to pay the visa program workers the local wage and also provide benefits. There are however loopholes that many companies know of to get away with paying these workers less. One of these loopholes is hiring outsourcing firms to hire H-1B visa workers so technically the employer is not breaking any rules by paying these agencies less money for the visa workers. Disney decided to let go of their current hard working employees just to save money.
Stakeholders
The H-1B program was created in 1990 to allow U.S. employers to hire temporary foreign workers with a bachelor's degree in advanced science, engineering, or computer skills to fill positions when American workers with those skills cannot be found. Disney is required to pay the visa program workers the local wage and also provide benefits. There are however loopholes that many companies know of to get away with paying these workers less. One of these loopholes is hiring outsourcing firms to hire H-1B visa workers so technically the employer is not breaking any rules by paying these agencies less money for the visa workers. Disney decided to let go of their current hard working employees just to save money.
Stakeholders
The stakeholders in The Walt Disney company case are as follows: the CEO of The Walt Disney Company, for approving the layoffs to cut labor costs. This move will save the company money so it affects the company directly. Next will be the executives/office managers. They are being affected by having all this changes take place that directly change the dynamics of the office. The main stakeholders that are affected by this case controversy are the data technicians that were laid off and their families.They no longer have their job, income, security, and are now having to struggle to find a job. Lastly, the H-1B visa workers, they are also being affected by this since they now have an opportunity to provide income for their families and this also can open doors for a lot of them to apply for permanent visas.
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| Entertainment Technician at Walt Disney World, one of many jobs being laid off |
Disney’s sole purpose is to make a profit for the company and did just that by cutting two hundred and fifty data technician’s positions and replacing them with H-1B workers. This shift in employees will save them money in the long run by paying H-1B workers less than the American worker. Even though Disney paid the employees severance pay, they will control their spending by hiring new temporary workers that can be paid less, which will ultimately save them money. Per the Labor Department, Disney cannot pay the H-1B workers less money, but there are loopholes that many companies know of and take advantage of. Many employers hire an outsourcing firm to hire H-1B workers so technically the employer is not breaking any rules since the H-1B workers are not hired directly through them. This is how many companies get away with displacing their current employees and replacing them with H-1B workers. Technically, viewing this ethical controversy through an individualist point of view, Disney did the right thing in order to increase their profit.
Utilitarianism
Disney did not apply utilitarianism to their business decision by not considering their employee's maximum happiness long-term. The employees were laid off without a single thought to their well-being and their families. The employees no longer had a means of income to provide for their family so Disney failed to make sure their decision did not affect any employees financially. Many are still unemployed and many were forced into early retirement which caused a shift in their lives that was not expected.
Kantianism
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| Cinderella's Castle at Walt Disney World |
Disney's approach of the layoff and hiring of H-1B workers does not agree with Kantian business ethics.Disney was not thinking rationally when they decided to lay off the data technicians that worked in their Florida office. They were not respectful towards the employees, especially when Disney made them train their own replacements. As mentioned early under the Ethics Case section, the Labor Department requires all employers to provide a notice to all current employees regarding the new hires: ‘On or within 30 days before the date the LCA is filed with ETA, provide notice of the employer's intent to hire H-1B, H-1B1, or E-3 workers. The employer must provide this notice to the bargaining representative of workers in the occupation in which the H-1B, H-1B1, or E-3 worker will be employed. If there is no bargaining representative, the employer must post such notices in conspicuous locations at the intended place(s) of employment, or provide them electronically.’
Disney failed to provide this announcement with at least a 30 day notice so employees were not allowed to make sure their positions will not be jeopardized. The employees were not allowed to fight for their careers and were basically cheated out of their jobs. Disney only acted on what was a benefit to them and in turn made a bad decision that cost two hundred and fifty employees their jobs and livelihood.
Disney failed to provide this announcement with at least a 30 day notice so employees were not allowed to make sure their positions will not be jeopardized. The employees were not allowed to fight for their careers and were basically cheated out of their jobs. Disney only acted on what was a benefit to them and in turn made a bad decision that cost two hundred and fifty employees their jobs and livelihood.
Virtue Theory
When looking at courage, Disney did not meet this trait due to the fact that they did not act ethically when deciding to lay off their data technicians in order to save money. Instead of Disney taking the necessary steps to insure their current employees were working to their standards and training those that needed a bit of help, they decided to terminate them to save more money. Disney was also not honest in this whole process. They did not give the employees sufficient warning in terms of posting or sending emails to inform everyone that H-1B visa workers would be hired. Disney was not honest when asked by the media as to their reasons to make the decision to let go of their employees. No issues were reported so they really didn’t have a justified reason to make this decision, other than to save more money. When it comes to self-control/temperance, Disney’s executives and office managers did not have the will power to take a stand against this unethical way of doing business. They allowed Disney to continue with the plan to lay off their employees in order to replace them with workers that will make less money. Disney might have thought they were doing right by making sure their financials were in good standing but forgot to consider how this would affect everyone else. Lastly, we look at justice/fairness. Disney was not fair to the data technicians and did not care as to how this would be affecting them and their families financially. Yes, severance pays were given, but there were requirements that needed to be met before those were given, such as training their replacements.
Justified Ethics Evaluation
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| Rober A. Iger, CEO of Walt Disney Company |
After studying the theories presented, it is clear to see that Disney did not act ethically correct when handling the layoffs of their two hundred and fifty data technicians under Utilitarianism, Kantianism, and Virtue. However, according to Individualism, they acted ethically correct since their only goal should be to make a profit, which they did by cutting labor costs.
In my opinion, there is no justification as to why Disney had to let go of their employees, especially when things have been going so well for all involved. Disney should have never laid off their employees to replace them with visa workers from the H-1B program. If they wanted to take advantage of the program they could have used their services elsewhere, where they were needed, instead of cutting American jobs to then give it to someone else. Disney has not made any comments to justify their actions so one can only assume it was to save money for that department, which is clearly a breach of their agreement with the Department of Labor, as discussed under the Ethical Case section.
In my opinion, there is no justification as to why Disney had to let go of their employees, especially when things have been going so well for all involved. Disney should have never laid off their employees to replace them with visa workers from the H-1B program. If they wanted to take advantage of the program they could have used their services elsewhere, where they were needed, instead of cutting American jobs to then give it to someone else. Disney has not made any comments to justify their actions so one can only assume it was to save money for that department, which is clearly a breach of their agreement with the Department of Labor, as discussed under the Ethical Case section.
Works Cited
American Immigration Council (2015). The H-1B Visa Program: A Primer on the Program and its Impact on Jobs, Wages, and the Economy. Retrieved from
The Walt Disney Company. Retrieved from
Thibodeau, Patrick (2015). Fury rises at Disney over use of foreign workers. Retrieved from
United States Department of Labor (2015). H-1B Program. Retrieved from
Zarronandia, Jeff (2015). Senator Calls for DHS Investigation of Visa Program After Disney Layoffs. Retrieved from
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