Mark Fiore
 (Mark Fiore)

UCSF Lays Off Tech Workers, Stepping Into Jobs Outsourcing Controversy

UCSF Lays Off Tech Workers, Stepping Into Jobs Outsourcing Controversy

Hank Nguyen is an IT employee at UC San Francisco. Until recently, his daughter wanted to follow in his footsteps and work in information technology. She was accepted at UC Santa Cruz and planned to study computer science.

Then, last July, the letters arrived. The first was the tuition bill from Santa Cruz. The second was a layoff notice from UCSF.

UCSF has a total of 565 full-time workers focused on core IT services. The research institute and hospital is cutting some 97 IT jobs –– including 49 full-time workers, 30 contractors and 18 unfilled positions. Those jobs are scheduled to end in February. The work is being outsourced to HCL, a multinational information technology firm headquartered in India. This is one of the two firms Disney took heat over for partnering with last year when it outsourced 250 IT jobs.

This is just one example of the kind of globalization and job losses President-elect Donald Trump talked about while campaigning.

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Nguyen cannot believe that this is happening to him, a worker in the tech industry. But it is. He and other IT workers at UCSF are now training their replacements, workers from HCL. “I’m speechless,” he says. “How can they do this to us?”

Nguyen worries he won’t have money to pay for his daughter’s education. She worries her expensive degree won’t lead to a stable career in IT. “I’m unsure about everything now,” Nguyen says. “She’s unsure as well.”

Originally from Vietnam, Nguyen says he escaped to America in 1981 and he restarted his life here from scratch. He taught himself about computers so he could get a job in the tech world. He thought it was the surest way for him to have a stable, middle-class life.

Hank Nguyen is losing his job because UCSF is working with an outside contractor.
Hank Nguyen is losing his job because UCSF is working with an outside contractor. (Sam Harnett/KQED)

Nguyen thought he had job security. He works with servers, the computers that run company software and handle data. It's part of a range of back-end IT work that keeps our modern computer-driven world running. But now, much of this IT infrastructure has been shipped overseas, says Ron Hira, a professor of public policy at Howard University.

“It's a silent destruction of really important innovation, high-wage, really the knowledge-based economy jobs that we're supposed to be moving into,” Hira says.

He says what’s really scary is that we don’t know how many IT jobs America has lost. The government doesn’t keep track of it, he says. Hira has studied IT offshoring for over a decade, and he has been gathering numbers to try to get a picture of this job loss.

By looking at IT employment abroad in countries like India, and the numbers of workers American companies like IBM now employ overseas, Hira has come up with a rough estimate. He thinks as many as 1.5 million foreign workers could now be doing IT jobs for American companies.

“It's huge in scale and scope, and it has long-term ramifications in terms of innovation, but also in terms of spillover jobs and career ladders for folks,” Hira says.

Changes in technology like cloud computing have contributed to IT job loss, but Hira says outsourcing has greatly accelerated the trend. And he says the main tool paving the way for outsourcing is the H-1B visa. Hira gave this testimony in front of Congress about how the H-1B visa is used to outsource jobs and undercut U.S. workers. HCL is mentioned as a company that depends on the H-1B visa for business operations in the U.S.

Controversy over this visa has been escalating in recent years. There have been numerous bipartisan attempts in Congress to reform the visa. They have all failed. Complaints about the visa range from the offshoring of U.S. jobs to how it can be used to drive down wages and create situations where companies can abuse H-1B workers. Companies like Southern California Edison have been criticized for effectively replacing U.S. workers with H-1B workers. The move led to a federal investigation, which did not end in the workers’ favor.

This visa cropped up in the presidential race after Disney shipped out 250 of its IT jobs, in part to HCL, the same company UCSF is working with now. Donald Trump at times criticized Disney and the visa. He drew applause at debates by saying the H-1B program should be dismantled, and he championed a laid-off IT worker at Disney who endorsed him. But it is hard to say what he will do in office, since he flip-flopped on the issue several times when pressed about actual policy decisions.

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Here is the back story on the H-1B. The visa is supposed to allow companies to hire the highest-skilled foreign talent. But in reality, outsourcing companies like HCL scoop up the most H-1B visas for lower-level IT workers. These H-1B workers are sent into U.S. companies to see how their IT systems operate, and then they work with large teams abroad, mostly in India, where labor is cheap.

At UCSF, eight of the 27 workers in the transition team that HCL sent in to learn the ropes at the school were on H-1B visas, according to UCSF's Vice Chancellor of University Relations Barbara French. While the transition team had H-1B workers, French says UCSF has a policy not to replace any of the employees losing their jobs with workers on H-1Bs. But now that the transition team has learned the IT needs at UCSF, much of the work can be done offsite and potentially offshore where labor is cheaper. French says HCL will have only 20 workers on the ground at UCSF.

Cutting costs is why UCSF is partnering with HCL, French says.

“We can save $30 million over five years by outsourcing,” French said. She also anticipates that as IT needs grow in coming years, working with HCL could help save more money.

French says UCSF came up with the outsourcing plan after seeing that the competition had already done a similar thing. French says this decision was not taken lightly and that the school held a job fair to find new IT positions within the UC system for employees being laid off.

Many hospitals have already outsourced parts  of their IT infrastructure to cut costs, and other universities are starting to look into doing the same. Meanwhile, UCSF is facing rising health costs and cuts in state funding. “We're feeling the squeeze,” French says.

French says UCSF provides around $130 million in charity care for the poor. She says to continue that kind of service, UCSF has to focus only on its core IT services, things like data analysis for researchers, cybersecurity and organizing electronic health records. French says while it is laying off some IT workers by outsourcing to HCL, the university continues to hire new IT workers to do more specialized work.

“Taking care of patient care IT issues, taking care of research IT issues, that belongs to us,” French says. “We need to be on top of it and grow it.”

The contract with HCL would allow all 10 UC campuses to similarly outsource portions of their IT work. Other schools are not yet making moves to do that, but IT workers at UCSF think this is the beginning of a trend that could spread throughout UC.

IT worker Hank Nguyen says it doesn’t make any sense that a state university system training the STEM workers of tomorrow would lay off the STEM workers of today. He says his work was once considered core and specialized, but it is now being outsourced. He worries the same will soon happen to the new IT workers UCSF is now hiring.

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Nancy Pelosi and state lawmakers are calling on UC President Janet Napolitano to halt the layoffs at UCSF, but there's no indication she will do that. If she doesn't, the IT workers will lose their jobs at the end of February.