Data Sheet—Tuesday, November 29, 2016
Shortly after our tumultuous election I noted that Silicon Valley won’t be pleased with the next U.S. president, in part because of his protectionist and otherwise anti-immigrant pronouncements. Access to H1-B visas for highly skilled workers is an assumed right in the heart of the information technology industry.
I promptly received an email from a Data Sheet reader claiming the visa designation is nothing of the sort. It is just another way for U.S. corporations to hire cheaper workers—in this case highly credentialed workers from poorer countries—in order to lower their costs and boost earnings. Companies need to maximize profits, of course. But that doesn’t make their exploitation of what The New York Times last year called immigration-law loopholes any more palatable.
A reckoning already is in motion. Reuters reports that Indian outsourcing firms, which for years have sent temporary workers to the U.S. to fill short-term needs, have begun focusing on U.S. campus recruiting as well as making acquisitions. The article notes that hiring the outsourcers for their “cheaper IT and software solutions” is an established practice in Silicon Valley. Again, just because it is established doesn’t mean local job seekers, also known as voters, will like it.
Tech will be a small but important part of this debate. Over the Thanksgiving holiday, The Wall Street Journal ran an article about a Dallas roofing contractor who can’t find enough qualified Mexican laborers. Tellingly, he pays $20 an hour for a roofer. In New York, a state where unions hold sway, the prevailing wage for a roofer is $70.37. Clearly, when a contractor in Texas says he can’t find enough roofers to complete his job, what he really means is that he can’t find enough laborers to profitably complete the job at the price for which he bid the project.
As a grandson of immigrants, I am fiercely pro-immigration. And I deplore Donald Trump’s vile and hateful tone toward immigrants in his campaign. And yet, the country is tackling this complicated topic now because of him. Things are going to get more complicated still come Jan. 20th.
BITS AND BYTES
It’s official. Samsung will consider structural overhaul. The company confirmed it has hired advisers to consider whether it should adopt a holding company structure, a move strongly advocated by activist shareholder Elliott Management. The process will take at least six months. Meanwhile, the company said it plans to return half of its net profits from the next two years to shareholders. (Fortune, Wall Street Journal)
Zenefits appeases more state regulators. The once high-flying insurance and human resource software firm will pay $7.2 million to settle claims that it skirted California licensing requirements. It only has to pay half now, because of its good behavior efforts to reverse the inadequate compliance policies. Zenefits previously settled investigations in South Carolina, Delaware, Arizona, New Jersey, Minnesota, and Tennessee. (Fortune)
Here’s what the iPhone 8 could look like. Apple is working on as many as 10 different prototypes, including a model that uses an organic light-emitting diode (LED) display. The technology, thinner than typical LEDs, would allow for a curved screen. (Fortune, Wall Street Journal)
American Airlines lands on IBM cloud. It will move some, but not all of its applications. This isn’t really a surprise as IBM was involved with the creation of the SABRE reservation system. (Fortune)
AT&T’s new Internet service is priced right, but there’s a catch. The telecommunications company is hoping to lure subscribers with a promotional offer of 100 channels for $35 per month. But that price won’t last long. Plus, you can’t watch certain NFL broadcasts, and this version of the service won’t let you record your favorite show. (Fortune)
Hewlett Packard Enterprise offers peek at radical new computer. The company says it has a working prototype of a project that it has dubbed The Machine. The system, which won’t be available commercially until at least 2018, relies on a new sort of memory to dramatically improve processing speeds. (Fortune, Wall Street Journal)
Google’s latest smartphone is a modest hit. Analysts project the company will sell approximately 3 million Pixel devices in the fourth quarter. That’s not enough to threaten market leaders Apple and Samsung, but it should provide a nice source of extra profit. (Fortune)
Activist investor calls for change at IT services firm Cognizant. The $34.6 billion company, which was originally spun out of Dun & Bradstreet, is feeling growth pressure from the corporate shift to cloud computing. Elliott Management, which owns about 4% of its stock, is pushing for stricter management of Cognizant’s margins as well as a $2.5 billion stock repurchase plan. (Wall Street Journal)
IN CASE YOU MISSED IT
Amazon Shares Slump Despite Record Cyber Monday Sales, by Stephen Gandel
Hackers Threaten to Expose Data Stolen from San Francisco Municipal Railway, by Robert Hackett
More Bad News for Tech Hardware Makers, by Barb Darrow
Facebook Hit With Lawsuit Over Alleged Racial Discrimination, by Jeff John Roberts
Apple iOS Is Losing Out to a Homegrown Competitor in China, by Lucinda Shen
Cyber Monday Sales Expected to Hit Record $3.3 Billion, by Leena Rao
These Car Dealers Really, Really, Really Hate Tesla, by Kirsten Korosec
ONE MORE THING
Keep your eyes on the road. The Navdy is a new smartphone-connected, dashboard-mounted display that projects maps and other information onto a car’s windshield so that it’s within a driver’s line of sight. It’s not inexpensive: it costs $799, including installation. (Time)