Pfizer and Procedure 117

Date: Sunday, November 09, 2008 9:44 PM

<<<<< JOB DESTRUCTION NEWSLETTER No. 1936 -- 11/09/2008 >>>>>

Pfizer continues to replace its American workers with H-1B contractors.
This newsletter has been reporting on the bloodletting at Pfizer for quite
awhile, so this isn't new news. There are a couple of new twists worth
mentioning however.

Item 1: Recently Senator Chris Dodd (D-CT) and Congressman Joe Courtney
(CT-2) sent a letter of concern to Pfizer. The letter asks the CEO of Pfizer
some interesting questions but it does nothing to stop Pfizer from replacing
its U.S. workers with H-1B visa holders. The reason these Congressmen can't do
anything to stop Pfizer is because replacing American workers is legal. Dodd
and Courtney are reduced to doing nothing more than asking questions instead
of demanding that Pfizer stop what they are doing.
It's not clear that Pfizer will ever answer the questions because they aren't
legally obligated to.

Sen. Dodd's letter should not be used as atonement for his legislative
history. He has consistently voted for H-1B increases as well as other types
of guest worker visas. Dodd voted for H-1B in 1990 and since then has earned a
grade of D- from Americans For Better Immigration for his consistent support
of increasing visas for foreign guest workers. In 2004 Dodd sponsored a bill
that would put some mild restrictions on offshoring government contracts but
the bill died quickly. Since then Dodd has given lip service to protect
Americans from unfair competition due to the use of H-1Bs or offshoring, while
voting to make the problem worse. The letter Pfizer was great, but it would be
even better if Dodd sponsored some serious legislation to stop the abuse.
Don't hold your breath waiting for Dodd to really do something.

Item 2: A document called Procedure 117 is getting a lot of publicity lately.
You can read it here:

Text of Procedure 117
http://media.theday.com/gbl/media/dynamic/pdfnews/proc117.pdf

Procedure 117 is definitely not a smoking gun. It's a rather mundane set of
Pfizer policies and procedures concerning contractors. It's not very different
than what I have seen at most companies who use contractors, and it gives no
clue about Pfizer hiring H-1Bs. The document says that contractors cannot work
at Pfizer for more than 12 months, which is fairly standard in high-tech and
doesn't necessarily mean that Pfizer will hire H-1Bs, who are often
contractors.

references:

http://www.eweek.com/c/a/IT-Management/Pfizer-Accused-of-Using-US-Workers-to-Train-Foreign-Replacements/
Pfizer Accused of Using U.S. Workers to Train Foreign Replacements

http://www.pharmalot.com/2008/11/pfizer-trains-foreign-workers-as-it-replacements/
Pfizer Trains Foreign Workers As IT Replacements

http://www.theday.com/re.aspx?re=a5d04996-c1f1-45d2-b60d-ea9c183ad35a
Critic links Pfizer Inc. to overseas job 'scam'

http://dodd.senate.gov/index.php?q=node/4617
Dodd and Courtney Express Concern Over Reports that Pfizer Will Cut Jobs in
Connecticut

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.eweek.com/c/a/IT-Management/Pfizer-Accused-of-Using-US-Workers-to-Train-Foreign-Replacements/

Pfizer Accused of Using U.S. Workers to Train Foreign Replacements By Kevin
Fogarty
2008-11-05

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 outsourcing project.

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.

Those temporary workers are scheduled to return to India, where they will run
the same systems as part of an outsourcing deal Pfizer signed in 2005 with
Infosys Technologies and Satyam Computer Services.

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.

U.S. 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."

Pfizer 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 replace U.S. 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 includes offshoring 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 products.

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.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.pharmalot.com/2008/11/pfizer-trains-foreign-workers-as-it-replacements/

Pfizer Trains Foreign Workers As IT Replacements

6 Comments
By Ed Silverman // November 3rd, 2008 // 8:40 am

The drugmaker has been training foreign workers in its Groton and New London,
Connecticut, R&D facilities over the past few months in anticipation of
transferring much of its IT work from local contractors to outside contracting
firms, according to The Day.

The sources insisted on not being identified because they didn t want to be
fired or lose a chance for re-employment. Some were hoping to retain their
jobs, and all were speaking with the expectation that, if the upcoming changes
at Pfizer are publicized, the drugmaker may reconsider its decision to
drastically reduce its local contracting force, the paper writes.

The new policy, known internally as Procedure 117, will force many
contractors, or contingent workers , some of whom have been working at Pfizer
for a decade or more, to leave by year s end, sources tells the paper. Pfizer
would not comment on what it called speculation and gossip.
"These rumors are distracting and hurtful to our colleagues who are working
together to deliver a pipeline of new medicines in areas of unmet medical
need," a Pfizer spokeswoman tells the paper.

Pfizer has between 800 and 1,000 contractors on site locally during any given
day, along with about 5,400 employees. More than half of the IT workers in
Groton and New London are contracted rather than being Pfizer employees,
sources said. Pfizer would not give a number for its IT work force.

At the same time, the paper writes Pfizer is adding foreign workers, mostly
from India, who are arriving at R&D headquarters on controversial H-1B visas.
These special visas were created to allow foreign workers to take jobs in the
US that could not be filled by Americans, but Pfizer has been using them to
replace American workers, sources tell the paper. "We re training them," one
source says.

Pfizer will not reveal how many H-1B workers it retains locally, though one
source put the number at anywhere between 50 and 100. But scores of other
foreign workers have been cycling through the local campuses over the past
several months in anticipation of moving much of Pfizer s IT functions
overseas, sources tell the paper, though recent developments indicate the
company may be pulling back from some of these plans.

Many of the Indian nationals are employed by Indian-based service providers
such as Infosys Technologies and Satyam Computer Services and then leased to
Pfizer at rates in many cases much lower than American contractors have been
making, according to The Day.

One source tells the paper that a local technical writer might earn a rate of
$65 an hour (but pocket only $40 an hour, with the contracting firm getting
the rest), while an employee of Infosys working locally on a Pfizer project
might be paid $35 an hour (but pocket $20 to $25 an hour, with the Indian
service provider earning the difference). An offshore technical writer would
get even less, according to sources, perhaps $17 to $20 an hour.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.theday.com/re.aspx?re=a5d04996-c1f1-45d2-b60d-ea9c183ad35a

Critic links Pfizer Inc. to overseas job 'scam'
Critic links Pfizer Inc. to overseas job 'scam'
By Lee Howard

Published on 11/8/2008 in Home ;Business ;Business Main Photo A leading critic
of a program that has allowed Pfizer Inc. to dramatically cut its local
information-technology work force says what's happening in Groton and New
London is a perfect test case to see if the new Democratic administration is
serious about stemming the flow of jobs overseas.
"The Pfizer situation is a clear, unambiguous case where loopholes in
immigration policies are being exploited to the detriment of American workers
and America's economy," said Ron Hira, an assistant professor of public policy
at Rochester Institute of Technology who has written widely about the H1-B
visa program and its abuses.

The H-1B program, originally intended to help U.S. companies connect with
foreign workers who have specialized skills not easily filled by Americans,
has devolved into a source of inexpensive labor to replace American workers
and a way to promote outsourcing, Hira said.

While the program's genesis in 1990 came at a time when the American economy
needed an influx of foreigners with special skills who could easily be
absorbed into the economy, those days are over, he said.

"The whole thing is basically a scam, and some people in Congress know it,"
Hira said. "They just don't feel compelled to do anything about it."

Among the abuses and bad effects of H-1B policies and procedures Hira has
documented are:

& The H-1B program allows foreign workers to come to the United States for
training and then rotate back to their home country as part of systematic
outsourcing efforts by U.S. companies.

& The original intent of the H-1B law was to find foreign workers to take work
that no American was willing or qualified to do, but the law now states that
companies do not have to look for American workers first.

& Companies do not have to demonstrate that a shortage of U.S. workers exists
and can, under certain circumstances, force a worker to train a foreign
replacement.

& H-1B workers are supposed to be paid the prevailing wage, which should be at
least the market wage, but many companies ignore this provision because of
loopholes.

& The H-1B program includes insufficient oversight, with employer applications
for H-1B workers essentially rubber stamped by the U.S.
Department of Labor. A September investigation of abuses in the system by the
U.S. Citizenship and Immigration Services found more than 20 percent of H-1B
applications were fraudulent or represented a technical violation.

At the Pfizer campuses in Groton and New London, according to a report earlier
this week in The Day, the company is implementing a year-old policy that
likely will result in hundreds of independent IT contractors losing their jobs
by the end of the year. Many of these jobs will be taken overseas, according
to sources, or be performed by foreign workers here on H-1B visas and employed
by Indian companies like Satyam Computer Services and Infosys Technologies.

U.S. Sen. Chris Dodd, D-Conn., and U.S. Rep. Joe Courtney, D-2nd District,
responded to The Day's report by sending a letter to Jeffrey B. Kindler,
Pfizer's chief executive and chairman, asking that he confirm the company's
intentions and reconsider its plans. So far, Kindler has not responded.

"Mr. Courtney remains committed to protecting and increasing high tech local
jobs throughout eastern Connecticut," said Brian Farber, a Courtney spokesman,
in an e-mail.

Neither Courtney nor Dodd aides responded to detailed questions about their
records on the H-1B issue.

"Pfizer plays a critically important role in the economy of southeastern
Connecticut," Dodd said in a statement. "As a responsible corporate citizen,
it is Senator Dodd's hope that they would think long and hard before they
choose to outsource Connecticut jobs."

Hira called the response by Dodd and Courtney weak. If they truly wanted to do
something about H-1B abuses, he said, they would have asked for a Department
of Labor investigation of the situation. But Farber said Courtney wants to
find out more information before proceeding.

At the very least, Hira said, an investigation would have stopped the process
of workers being forced to train their replacements, since companies that have
been designated "H-1B dependent" cannot engage in such practices. "H-1B-
dependent" companies like Infosys and Satyam are those that have a large
percentage of their workers holding the controversial visas.

"The H-1B program has been thoroughly corrupted," Hira, an American of Indian
descent, said in an article last year in The American Prospect.
"Rather than providing firms with workers who possess unique skills, the
program is dominated by low wage workers with ordinary, rank-and-file skills.
And, rather than preventing work from going overseas, the program is speeding
it up."

The problem, as Hira sees it, is that major corporations have huge incentives
to take advantage of H-1B loopholes, while those on the other side are
nonunionized IT workers. These workers simply don't have the lobbying power to
fight the corporations, he said.

H-1B visas and their abuse became a big controversy in 2003-04 in the Hartford
area, when many of the nation's largest insurance firms began replacing their
American workers with IT specialists from India. At the time, former U.S. Rep.
Nancy Johnson and Dodd wrote legislation geared toward protecting American
workers, but it didn't go anywhere, according to Hira.

Hira said Dodd's attention to the H-1B issues appears to have waned since then
and U.S. Sen. Joe Lieberman, an initial supporter of foreign-visa reform, has
recently changed sides and is calling for an expansion of the program with few
protections.

Just this April, Lieberman, along with three Republican senators, introduced
the "Global Competitiveness Act of 2008" that would increase H-1B visa levels
from 65,000 to 115,000 over the next two years as well as recapturing 150,000
unused H-1Bs and distributing them over a three-year period.

"We must address the H-1B visa crisis to ensure that America remains the world
leader in innovation," Lieberman said in a statement at the time.
"Well-educated, highly skilled workers are key to our country's
competitiveness."

Lieberman did not respond to a request for an interview sent to one of his
aides. He did not join Dodd and Courtney in their letter to Pfizer.

Pfizer, according to a memo acquired by The Day three years ago, had decided
to outsource much of its IT work at that time, choosing India-based services
companies Satyam and Infosys. In case there was any question about the reason
for the move, the memo was titled "Evaluating Options: Moving IT Services to
Low Cost Locations."

Hira said he doesn't know how local workers will avoid displacement at this
point. But he's hopeful that president-elect Barack Obama will do something
about the H-1B problem, even though he has called for expanding the program in
the past.

"Here's a case where Pfizer is putting its profits ahead of its American
workers in a way that clearly skirts the spirit, and maybe even the letter, of
the law," Hira said.

"Will Obama put American workers first," as he promised in the campaign when
he chastised CEOs for putting profits ahead of American workers, he asked.
"Here's his chance to put his campaign promises into action."

L.HOWARD@THEDAY.COM

Regional

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://dodd.senate.gov/index.php?q=node/4617

Dodd and Courtney Express Concern Over Reports that Pfizer Will Cut Jobs in
Connecticut October 3, 2008

Senator Chris Dodd (D-CT) and Congressman Joe Courtney (CT-2) sent the
following letter today to Jeffrey B. Kindler, CEO of Pfizer Inc, expressing
their concern over recent reports that suggest the company has been
training foreign contractors to replace local workers at their facilities
in New London and Groton.

The full text of the letter is below:

November 3, 2008

Mr. Jeffrey B. Kindler
Chief Executive Officer and Chairman of the Board
Pfizer Inc.
235 East 42nd Street
New York, NY 10017

Dear Mr. Kindler,

We are writing today to express our concerns over media reports that Pfizer
has been training foreign contractors to replace local information
technology workers at the New London and Groton facilities as part of a
new, company-wide policy known as Procedure 117. In our view, any
reorganization that would result in the loss of jobs for local workers
would be troubling, and we would urge you in the strongest terms to
reconsider any such action.

We are also concerned that, thus far, Pfizer has not publicly released
information about any pending moves under Procedure 117. The only
information available has come piecemeal from the workers themselves, who
are understandably worried about the possibility of losing their jobs.

Given Pfizer s critical importance as one of the largest employers in
southeastern Connecticut, we hope you will be able to provide us with
information regarding these potential workforce changes at Pfizer. First,
we would like to know if these press reports are accurate. If these
initiatives are indeed under consideration, we would appreciate answers to
the following questions:

How many workers will be affected by these
changes? Will any compensation be offered to those contractors who are not
re-hired?
How will the salary and benefit packages of those
who are retained following this reorganization be affected?
Of the jobs currently performed by Pfizer
employees or local contractors in Groton and New London, how many will be
relocated overseas?
How many workers in Groton and New
London will be replaced by foreign contractors residing in the United
States on H1-B visas? If skilled workers are already available for these
jobs locally, why does Pfizer find it necessary to hire workers from
abroad?

Thank you in advance for your response to this request. Should you have any
questions or wish to discuss this request further, please feel free to
reach out to us at any time.

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