Monday, December 19, 2022

Capitalism's Christmas Gift


 Many American workers are suffering the mental and financial anguish of being suddenly laid off. After corporations complained of labor shortages through 2021 and 2022, several companies have shed workers in mass layoffs as 2022 comes to a close. Numerous high-profile tech companies, including Facebook’s Meta, Twitter and Amazon, announced mass layoffs in recent weeks.

Catalent, a pharmaceutical manufacturing contractor, recently informed employees the company is going to cut about 600 jobs in Indiana, Texas, and Maryland over the next several weeks, as demand for Covid vaccines has dropped significantly. Other corporations have announced mass layoffs right before the holidays, claiming economic downturns have driven the cuts, even as they record profits and the economy showing no signs of a downturn. 

Stellantis, which manufactures the Jeep Cherokee SUV, announced on 9 December the closure of an Illinois plant resulting in more than 1,200 workers being laid off by the end of February 2023. 

“It came without the slightest bit of warning and absolutely no details. It wasn’t even a rumor so it just dropped like a bomb,” said Deanna Viel, a worker at the plant Belvidere, Illinois.

Right before Thanksgiving, about 2,700 workers at United Furniture – a company that has facilities in Mississippi, California and North Carolina – received an email notifying them they were laid off immediately.

“These companies are all making money. They are doing it because other companies are doing it,” said Stanford Graduate School of Business Prof Jeffrey Pfeffer on the recent trend of tech companies shedding employees. “Layoffs often do not cut costs, as there are many instances of laid-off employees being hired back as contractors, with companies paying the contracting firm. Layoffs often do not increase stock prices, in part because layoffs can signal that a company is having difficulty. Layoffs do not increase productivity. Layoffs do not solve what is often the underlying problem, which is often an ineffective strategy, a loss of market share or too little revenue. Layoffs are basically a bad decision.” 

 A study by UK researchers found a layoff to be the 7th most stressful life experience, correlated to significant increases in developing a new health condition as well as the risk of suicide, depression and substance abuse.

‘Heartless’ mass layoffs hit US workers ahead of holidays | Business | The Guardian

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