Company that received large incentive package to create jobs in New Orleans plans to hire overseas, records show
9th December 2019 · 0 Comments
By Samantha Sunne
The Lens
When DXC Technology, a multinational IT firm, opened up shop on Poydras Street last year, both the mayor and the governor were there to cut the ribbon on a new Digital Transformation Center.
“In a rigorous competition for this Fortune 500 company’s largest Digital Transformation Center, our state succeeded because we offer an extraordinary city in its Tricentennial year and an exceptional higher education partnership,” Governor John Bel Edwards said in a May 2018 statement.
The company is scheduled to receive over $100 million in grants and incentives from the state and city in exchange for creating 300 jobs a year over the next six years. That includes $25 million for the state’s largest ever higher-education investment for a private workforce, according to a statement from the governor’s office.
When it announced the Digital Transformation Center in 2017, DXC said it was attracted to Louisiana for its talented and diverse workforce.
“This newly formed IT services company will create thousands of job opportunities for New Orleanians, adding to our rapidly growing digital economy,” then-Mayor Mitch Landrieu said in 2017, when the deal was announced.
But over the next two years, they filed more than 150 documents asking for federal approval to hire workers from overseas.
According to a Lens review of data from the U.S. Department of Labor, DXC has filed 152 applications for H-1B visas for foreign workers in New Orleans in the last fiscal year. Some of the applications were for up to 24 employees, but it’s not clear how many DXC is actually trying to hire.
DXC spokesman Richard Adamonis did not respond to The Lens’ questions about how many foreign workers DXC is planning to hire, or how many of the 300 hired this year were on H-1B visas. Most of the applications had starting dates in the fall of 2019. He instead provided a brief written statement.
“Our agreements with the State and City establish specific goals for job creation within the Greater New Orleans region, without regard to employee origin,” Adamonis’ statement said in part. “Many of these new hires join DXC through our local educational partners.”
H-1 B visas — used to bring in skilled workers from abroad — were an issue in Edwards’ recent reelection campaign. This fall, his campaign ran ads criticizing his opponent Eddie Rispone for hiring foreign workers, using the visa program, instead of Louisiana locals.
The governor’s office did not directly respond to The Lens’ questions about DXC’s use of the H-1B program.
“The Governor is committed to creating the trained workforce of the future so that all companies, including DXC, will have the best pool of workers to support their projects,” Deputy Chief of Staff for Communications Christina Stephens said.
Meanwhile, the company is meeting hiring goals, but missing the mark on how much it was supposed to spend on payroll. Last month, the City of New Orleans reduced its inaugural contribution to DXC because it hadn’t met payroll requirements, according to reporting by The Advocate.
The company pledged to hire 300 employees at around $63,000 per year. A DXC spokesman told The Advocate the average salary exceeded this goal, but declined to explain why its payroll didn’t match.
In the visa applications, salaries mostly ranged from $54,000 to $94,000, according to Labor Department data. Companies must offer H-1B visa workers the prevailing wage in the U.S., if not more.
DXC is also eligible to have around six percent of some employee salaries reimbursed under the state’s Quality Jobs Program. The law requires these employees to be Louisiana residents, but does not specify that they can’t be immigrants.
Adamonis did not respond to The Lens’ question as to whether DXC planned to request subsidies for H-1B workers.
Louisiana Economic Development department Secretary Don Pierson said LED might also reduce its contributions this year due to payroll issues. DXC has not received any incentives yet.
Asked about the H-1B applications, Pierson said those workers will be good for the state.
“All workers hired from outside Louisiana for DXC Technology, or for other employers, represent a net migration gain for the state, and contribute toward ‘brain gain’ rather than ‘brain drain,’” Pierson said.
Erika Zucker, a policy advocate at Loyola’s Workplace Justice Project, said she supported these kinds of partnerships, where the government can refuse incentives if its needs are not met. But she added that job creation projects using public money should go to local people.
“There’s this idea that they’re supposed to create 300 jobs in the first year,” she said. “And if those jobs are not being filled by local people, then the question becomes, should this company be getting any incentive?”
As of late November, 130 of DXC’s visa applications had been certified, meaning they can progress to the Customs and Immigrations Services agency for further approval. A Customs and Immigrations Services official declined to specify how many applications the agency had approved.
Tina Chang, associate vice president at UNO’s Division of Professional and Continuing Education, said the university worked with DXC and other companies to develop new programs to meet demand for technology jobs. She said the company had hired 37 UNO students and graduates so far.
“(UNO) has developed a variety of tech certificates and workshops to serve the burgeoning needs of the tech industry as well as regional employers seeking employees skilled in these areas,” she said. “These tech certificates and workshops were co-created with highly knowledgeable working professionals at leading companies such as DXC.”
The company’s shares fell 50 percent this year, likely due to declining revenue and failure to cut costs, according to Forbes. Louisiana’s state employee retirement system lowered its stake in the company by 6.7 percent this year according to Tech News Observer.
The above article originally appeared in The Lens on its website (www.thelensnola.org). The Louisiana Weekly enjoys a partnership with The Lens.
This article originally published in the December 9, 2019 print edition of The Louisiana Weekly newspaper.
