Toys R Us

In an article dated September 29, 2015, Julia Preston discusses Toys R Us brining temporary foreign workers into the US in order to ultimately move jobs overseas. The temporary visa program is known as H-1B and allows foreign workers, with college degrees and “highly specialized knowledge” to come to the United States and fill a job that would otherwise be left vacant. Preston describes a young woman from India working side by side with a Toys R Us accountant, learning every aspect of her job over the course of four weeks. After the next few months, a total of eight outsourced workers came to the US and did the same thing. They learned every specific detail in order to create job manuals for 67 different jobs!

While there has been a fair share of controversy surrounding the H-1B and the practices of American companies, it is not intended to replace American jobs that Americans were doing in this country. Preston points out almost the opposite, Indian workers are coming to America, with no particular specialized skill set and being trained by the Americans that are being laid off! Toys R Us laid off approximately 70 workers (mainly in Accounting) and outsourced the jobs to India. A spokeswoman for Toys R Us stated that staff reduction was “part of designing a streamlined, more efficient global organization to make it fit for growth.” She went on to say that “the outsourcing resulted in significant cost savings.”

Direct Link: http://www.nytimes.com/2015/09/30/us/toys-r-us-brings-temporary-foreign-workers-to-us-to-move-jobs-overseas.html?_r=0

This article deals directly with the concept of Outsourcing, discussed briefly in Chapter 8. While the article did not directly discuss the process Toys R Us went through in order to come to the final decision of outsourcing the accounting jobs, I would surmise there were multiple costs taken into consideration. Toys R Us would need to consider both the variable and fixed costs of performing this specific job. Based on the decision they made (to outsource,) it is fair to assume that the incremental costs of keeping the Toys R Us Accounting positions in America exceed the incremental costs of outsourcing.