Yves here. We were far from alone in saying that having the Fed try to tackle this inflation using its blunt tool of interest rates, was destined to whack workers when labor cost rises weren’t driving the overall economy price pain. And that’s now happening in a visible way. It is no longer hourly laborers and lower-skill white collar employees that are taking a hit. From Business Insider:
Barely three weeks into the new year, tens of thousands of Big Tech employees are staring down the barrel of unemployment.
Microsoft said it’s letting go of 10,000 workers over the next few months, while Google will let go of 12,000 employees. Amazon meanwhile has begun its biggest cuts ever, with plans to lay off 18,000 this year.
All told, more than 55,300 employees from more than 154 tech companies have been affected by layoffs in 2023, according to Layoffs.fyi, a layoff tracking site.
To justify the job losses, CEOs like Google’s Sundar Pichai and Salesforce’s Marc Benioff have repeated the refrain of a slowing economy, framing the layoffs as a necessary backtrack after the over-hiring of two years ago.
The Wall Street Journal also reported undue enthusiasm from CEOs at Davos for productivity gains, which is a fancy way of saying “squeezing employees”.
As for the consternation about Mr. Market’s applause for corporate downsizing, we described long form in a 2005 Conference Board Review article, The Incredible Shrinking Corporation, that executive fixation with stock prices (which was increasingly a big part of their pay packages) rewarded cost cutting and discouraged investment and risk taking.
By Sonali Kolhatkar, an award-winning multimedia journalist. She is the founder, host, and executive producer of “Rising Up With Sonali,” a weekly television and radio show that airs on Free Speech TV and Pacifica stations. Her forthcoming book is Rising Up: The Power of Narrative in Pursuing Racial Justice (City Lights Books, 2023). She is a writing fellow for the Economy for All project at the Independent Media Institute and the racial justice and civil liberties editor at Yes! Magazine. She serves as the co-director of the nonprofit solidarity organization the Afghan Women’s Mission and is a co-author of Bleeding Afghanistan. She also sits on the board of directors of Justice Action Center, an immigrant rights organization. Produced by Economy for All</a,> a project of the Independent Media Institute
Alphabet, the parent company of Google, has announced it will lay off about 6 percent of its global workforce. Google CEO Sundar Pichai sent his employees a letter warning of imminent layoffs and saying how “deeply sorry” he was. He offered for workers to “feel free to work from home” for the day in order to process the tough news that about 12,000 of them would soon lose their jobs.
This was roughly the same number of new employees that Alphabet lured to join its workforce last quarter. According to Investor’s Business Daily, the company “added 12,765 employees, which was above Wall Street estimates.”
Pichai was frank about why he had to fire so many people. He admitted in his letter that the company had a “huge opportunity” thanks in part to Google’s “early investments in AI,” and that to “fully capture” this opportunity, he would “need to make tough choices” such as cutting 12,000 jobs. Surely his laid-off employees could understand?
Wall Street thanked Pichai for his ruthlessness, with CNBC reporting that “Google shares were up more than 5 percent in early trading after the news” of layoffs.
It’s a familiar story elsewhere in the technology industry—once considered the most lucrative sector for secure and well-paid employment. Microsoft plans to cut 10,000 jobs. Amazon will ax more than 18,000 workers. Meta, Facebook’s parent company, fired 11,000 workers last November. And, Twitter will be firing even more workers than the number initially laid off when Elon Musk first took over the company in 2022.
In response, stock values are rising. Wedbush Securities, a top investment firm, predicts a 20 percent boost in tech share values this year alone, directly as a result of job cuts.
Les Leopold, executive director of the Labor Institute in New York, wrote in an op-ed in the Los Angeles Times about the “long-term social devastation” that arises from mass layoffs, citing research about worsened health impacts, psychological trauma, and even an increase in suicides.
For decades, Americans have been sold the lie that stock values are an indicator of economic wellness. The popular syndicated radio program Marketplace every day dutifully airs the values of the Dow Jones, the Nasdaq, and the S&P 500 indexes down to the fraction, and plays correspondingly happy, sad, or ambivalent music. The music makes it clear that society ought to celebrate when numbers are higher than the day before, and mourn when the numbers fall. In other words, Marketplace is indirectly urging us to be happy about thousands of people losing their livelihoods.
There is a high likelihood that some people among the tens of thousands who are losing their jobs in the tech sector will kill themselves in response.
But we are supposed to celebrate because stock values are rising.
Among those whose future is now suddenly tenuous are untold numbers of immigrant workers, lured to the U.S. by tech companies on H-1B visas. We don’t know how many foreign workers are impacted because, according to the New York Times, “employers have not disclosed how many workers on temporary visas have been let go.”
Asians, and Indians in particular, are disproportionately part of the tech workforce in California’s Silicon Valley. According to the Silicon Valley Institute for Regional Studies, an analysis of the latest U.S. census numbers finds that Indian nationals comprise more than one-quarter of all college-educated residents of Santa Clara and San Mateo counties who are employed by technology firms.
Their immigration status is tied to their jobs by the H-1B visas on which they likely arrived in the nation. Now, if they are among the unlucky ones facing unemployment, they have only two months to find new employment—or risk overstaying their visas.
What does the American economic punditry have to say in response to the social devastation of mass layoffs? One Harvard Business Review writer advises newly unemployed tech workers to “reconfigure your mindset,” and create a “job-hunting schedule.” Perhaps there should have been one more suggestion: “try not to kill yourself as you face the grim prospect of leaving a country you think of as home.”
Another adviser, also writing in Harvard Business Review, offers ways of “managing your emotions after being laid off,” which includes the suggestion: “consider starting a side hustle.”
But only a few months ago, Americans were being told that the “labor market” was “tight,” or “hot” (which is economist-speak for plentiful jobs and not enough workers), as well being warned that inflation could result. There was rampant speculation that this meant workers had more leverage and that they could use it to bargain for higher wages. Now, with massive layoffs in at least one major industry—technology—which is seen as central to the economy as a whole, will the labor market “cool”? It’s hard to say. Workers are expected to live (or die) at the whim of the market.
If the purpose of an economic system is to ensure the well-being of the people within that system, then the U.S. economy appears to be doing the opposite, lamenting worker leverage and wage growth, and celebrating layoffs. In other words, the values of our economic system are antithetical to human well-being.
We don’t have to accept such a dehumanizing economy.
Congress could pass a bill eliminating per-country limits on employment-based visas and other obstacles for permanent residency applications so that foreign workers whose lives are upended by a fickle economy have leverage to remain in the U.S. if they wish.
We could do what people in other countries do. For example, in France, more than a million people are on striketo protest the government’s proposal to raise the retirement age. They have brought the country to a complete standstill, making it clear that the economy works for them, not the other way around.
Similarly, in Spain, striking taxi workers are making it clear that there will be no business as usual if their well-being is eroded. In the UK, where a new conservative government is trying to dilute the power of workers to strike, thousands of people marched in protest under the banner of “Enough Is Enough.”
Replicating this in the U.S. means increasing union membership dramatically. The U.S. Bureau of Labor Statisticsreleased a recent report finding that in spite of strong union activity in the past year, and a pro-labor president, unionization levels fell to a record low, largely because most new jobs being added are nonunion. Greater levels of union membership would mean greater job security and greater pressure on the economy to ensure worker rights.
Another option, especially to counter massive layoffs, is to demand that the government step in to employ the jobless. A new campaign led by 10 economic justice organizations called Full Employment for All calls for a “targeted federal program for subsidized employment” that “could create jobs and economic growth.”
The campaign is inspired by the ideas of Rev. Dr. Martin Luther King Jr., who gave his famous “I Have a Dream” speech 60 years ago this year at the March on Washington for Jobs and Freedom. Note that the word “jobs” came before “freedom” in the title of the march. The demands of the march included “[a] massive federal program to train and place all unemployed workers—Negro and white—on meaningful and dignified jobs at decent wages.”
We don’t have to accept layoffs as the price of economic growth. Instead of “reconfiguring our mindset” in searching for new jobs, we could demand a new economy that works for us.
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The government could also regulate executive compensation in the following manner:
No golden parachutes – top executives have to have the same severance and retirement plan as the majority of the employees.
All top executive bonuses with a valuation above national median income must be put in an escrow account for five years with the company able to clawback monies or rescind options if the company struggles or tanks in that period. And there is no early withdrawal, even if the executive moves on or retires, they don’t see those bonuses until the five years are up and the company is still striving. IOW force at least some long term thinking on their parts.
But that will happen about as soon as the business press treats mass layoffs as a huge red flag about mismanagement, something that is mere common sense, rather than a reason to cheer.
Very very simple solution.
Reverse Saint Bill Clinton’s gift to Wall Street.
Pre-Saint Billy, ALL executive compensation higher than $1m had to come out of of POST-tax profits. Can you imagine shareholders screaming if the C-Suites had awarded themselves today’s bloated salaries out of shareholder money?
With an incredibly simple rule change by St. Billy, ALL executive compensation now comes out of PRE-tax earnings, i.e., you, my dear fellow taxpayer, are now subsidizing these ridiculous executive payouts.
Perfect example, Hank Mckinnell, former CEO of Pfizer, $83m golden parachute in 2006 dollars that YOU paid for.
All it would take to correct this situation is to revert to the previous tax rule and reinstitute are more egalitarian corporate salary structure with great resilience to vagaries of the economy. Somehow, I think this change is now fixed in stone.
Actually IIRC it was Clinton who implemented the rule that exec compensation above $1M was subject to corporate taxes, but added a loophole that allowed performance bonuses to remain pre-tax. The result was CEOs now receive smaller base salaries but get large bonuses based on company stock prices, and much of the bonuses are paid in stock. That’s why corporations are fixated on stock price over actual performance, and also explains the ridiculous amount of stock buy backs to artificially inflate stock prices.
Agency, where management comp is a type of problem. Who really speaks for the shareholders, employees, vendors, communities and others that are impacted by company actions?
Agency, where there is nobody to blame because you can’t get anyone to admit anything. In other words, the Investor Relations and other stooges are working to keep the obfuscation and misdirection going. Follow-up gets lost in the onslaught of other so-called news.
Look at the past few decades of rapacious, craven, venal and other behaviors. Then demand that there be some changes, like regulators who actually regulate, boards and execs who bear AND RECEIVE personal responsibility, and financiers who aid and abet.
He claimed later ‘the Republicans made me do it’ IIRC
Stock options are even more lucrative because the strike prices are very favorable to the executives, they can manipulate the stock price by using buy backs and best of all the taxes are lower for gains. Most employees are NOT eligible.
Also makes them have the same priorities as the board, rather than perhaps being at odds with them.
All in all the arrangement makes a mockery of the corporate veil idea.
Ahh, many thanks to you all for clarifying the actual procedural history and correcting my garbled memory of the event.
Greater “Union” populations don’t work anymore. Most Union leaders have long since been “paid off” by the US Financial thieves.
Asking the US “government” to restrict “executive bonuses” or to curb “executive pay” will not happen. The entire Financial Apparatus of highly powerful and very wealthy members, have long since overshadowed any or all power of the US government. It’s the US Federal Government who is strictly bound by doing the bidding of the Top Wealthiest 10%, 5%, 1%. That includes the power of the Big Banks in New York.
The federal government is part of finance. They have made themselves and family exempt from insider trading.
I’m thinking of you, Nancy…
A good friend of mine who lives in India said that with the generous severance package Google is offering including at least half a year of salary, employees on H1B will be able to live quite comfortably without working for some years if for some reason they were unable to find a new job and are forced to leave the US. She qualified her statement by saying that the money would run out faster if they were to live in big cities like Mumbai, etc.
Anyway I am not trying to minimize the job loss, but the job market still appears to be strong, and Wolf from WolfStreet has repeatedly pointed out that many employers including startups are still hiring.
… are forced to leave the US.
I was reading this more of an injection of leading-edge technical people with capital into the Indian high tech industry. Sounds like a winner for India.
As someone who has worked with H-1B workers in the tech industry for over 25 years, I would say that four out of five workers from India are not worth employing. The good ones are really good, but the majority are not.
When I was at a large online retailer (15 years – 2004-2018) we were offered three workers in India for the price of one in the US. Most teams declined because the productivity was lower. Other sources from H-1Bs we used (Korea, China, Romania, UK, Peru, Argentine, Chile, SA) were MUCH, MUCH better.
fresh graduate engineers from anywhere
Fixed it for ya…
A much more accurate, down-to-earth source is http://www.shadowstats.com. There you find more accurate employment, unemployment figures, the CPI status, etc. etc. Unlike the unemployment figures the US spews out, Shadowstats.com counts not only Unemployment Figures, AND the millions of unemployed citizens who are no longer even counted. Currently, there are almost 40 Million Americans who have become “Impoverished.” They don’t count anymore. Wolf Street has never, ever revealed that kind of data.. Nor does he make distinctions between “Full Employment” vs “Part Time employment.”
Let’s also acknowledge how expensive it is, living in America today. Consider the incredible costs to the employed, unemployed folks forced to pay vast amounts of Big Insurance Costs: health care, auto/home/rental costs. The high interest rates the Banks charge on credit card, mortgages, daily food purchases, etc. etc. Right now, all signs point directly to a dying society save for the select few who have good paying jobs, along with the ever increasing wealth of The Super Wealthy.
The phrase that catches my eye, “We don’t have to accept such a dehumanizing economy.” Wait a second, is this individual living on a different plant in a parallel solar system. \sarc
Hell, Jack Welch and “Chainsaw Al” have been doing this dance for a lot longer than Alphabet has been in existence. Or more recently, Carly and her disastrous combination that dramatically altered and wrecked HP. Back on topic, well Mr. Cramer of Mad Money and CNBC finally has the outcomes he proclaimed were right and necessary. Notable among their louder voiced anchors, he has been harping for months that the layoffs must happen. As is often repeated, the beatings will be ongoing until morale improves.
Added. A Job Loss can be a life altering event. Certainly altered mine when it happened twice in the distant past, but I call them marks of experience and also what the hell might I have done differently, never really sure it mattered.
They got the message, Mr. Sigoloff.
Because now it affects the new money tech bros, while in the past it was done to “geriatric” companies in need of “disruption”.
And yeah, ever since HP and Nokia was dismembered thanks to boardroom meddling i have been blaming “investors” for all the troubles in the world. But they keep hiding behind the so called corporate veil.
You would hope that Mr. Market would be operating along fairly rational lines but for a very long time, I have noticed that it looks at corporations like a high school popularity contest. So they look at one contestant and say that doesn’t she look great? And when you point out to them that she actually has early stage bulimia, retorts that may be so but doesn’t she look great now? Wall Street cheers whenever a company sheds workers but does not stop to ask which workers exactly. No analysis whatsoever. So if one corporation sheds workers at the expense of their R & D division, it is all the same to Wall Street not recognizing that that corporation is now eating its seed corn. In short, Mr. Market not only has no memory but is also a complete idiot.
Yeah, Wall Street is just as fad addicted as high school kids.
A few big ones do a calculated move to outsource some operations, and suddenly there will be a frenzy to do so by every penny stock company out there.
It still amazes me that somehow destroying a company is considered good for business or the economy. I could write a long rant about it, but many people smarter than me have written books about the insanity, the complete lack of sense of this, so why do so? Just more people justifying economic pillaging and burning as well as the destruction of human beings because their paychecks demand it.
Perhaps Google’s best days are history. How many companies, mostly small did Google destroy on it’s path to dominance and now it’s use case, search, is garbage and it’s way of making money, selling adds, is a black box where about 99 cents of every buck is wasted.
It was a long time ago, and I conducted a small experiment by buying adds through a Google property and lo and behold almost all the ‘impressions’ were sucked up by bots mostly from Google itself. As best as I could tell, only a few (less than five) actual humans saw them before the money ran out, so that was my lesson to never advertise like that again. It is a scam.
The author uses the word ‘value’ a lot when ‘price’ is the better choice, and the price I paid had the value of zero. The coders won, once.
Here are a couple of links on Google’s numbers. It pays no dividends but “returns cash to shareholder through stawk buybacks”. The only reason to buy it’s stawk is to sell it to a greater fool in the future.
https://www.theverge.com/2022/10/25/23423560/google-q3-2022-growing-revenue-shrinking-profits-earnings
https://www.kamilfranek.com/how-much-google-alphabet-pays-out-in-dividends-and-buybacks/
I think these recent layoffs highlight the uselessness of the popular advice to people…Learn to code! Laid off Appalachian coal-miner? Learn to code! Thinking of going into the arts? You should learn to code. Over 50? Homeless? Starving? You know what your problem is? You never learned to code. See those poor kids hanging around the projects? Somebody should teach them how to code!
Capitalism eventually consumes everything it touches. There is no safe harbor.
For too long there’s been a brain drain of the the brightest talent being whisked away from their home countries to go and cram Silicon Valley cubicles building apps. I hope this race to climb the tech layoffs leader board gives anybody thinking of doing this a moment to pause and reflect on their decision.
Not to defend the wicked ‘do more evil’ google but the employees from other countries (especially fro India) get a salary about 10x what they would in their home county. The working conditions here are much better here and they save money by sharing their living quarters with their fellow countrymen. Most take their savings (after 3 or 4 years) and go home. In the meanwhile Google, Apple and other sillycon valley outfits do damage to the US citizens who have borrowed and slogged to get their tech degree in this country.
Most of Google’s business is aimed at snooping and gathering private info from people. In addition to using YouTube, Gmail, GVoice, GTranslator, GImages and myriad of their “free” tools they also collude with most websites to vacuum up data and give them a cut to incentivize them. Next time check your browser cookies before and after you use Gmail or any other Google tool. You’re sure to find cookies for Youtube and others even if you didn’t visit that site.
Most of them are newly minted graduates that are single and healthy.
Thus moving to a nation where they get a paycheck that is supposed to cover family and health expenses when they have none are a straight win. Then once family or health happens, they can always pack up and go back to the home nation where public healthcare and childcare awaits.
“Big Tech employees are staring down the barrel of unemployment.” – the ruling class is getting more open about how they view labor. I was in tech 42 years and only got laid off once, for 11 months in 2009. It was awful. As time goes on you start getting depressed and have occasional panic attacks. Fortunately, I got back into work.
Unfettered capitalism is cruel.
Big Tech is only the start. AI will be a clear and present danger to livelihoods for anyone whose job can be automated. The present social contract will need revising, and not by the goons attending the WEF.
It has been years since i first read hand wringing about how tech was disrupting the career path of lawyers.
used to be that after passing the exam they would start as assistants doing discovery by digging through whatever piles of paperwork a case involved.
But now instead the firm can have all those docs scanned and OCRed into a computer, and then run searches on them in all manner of ways.
Time to remove R&D tax credits and punitively tax stock buybacks and executive bonuses if mass layoffs happen.
Google has been notoriously bad at sustaining and monetizing new products. The successes have been all about extending and maintaining its dominance in search and ads (Android, YouTube, maps).
My niece in law is a mergers and acquisitions attorney for Amazon for the last 4 years.
. The amount of money she is making 6 yrs out of law school is almost unimaginable. She works from home almost exclusively and rarely works anything like a full day or week. Her spouse, my nephew, works a very ordinary not well paid middle class job( he has no degree) .
Yet without any inheritances they were able to buy a 2 million $ home in Seattle( yes that is not unusual in Seattle) which they have had professionally high end remodeled and added on to, employ a private nanny, travel constantly on vacation US and abroad, and now this week they told us they just purchased a multi multi million $ SUMMER home in the San Juan Islands AND a quite large ocean worthy boat to go with it.
The point being clear I hope.
She is actively helping Mr Bezos put small companies out of business and it is obvious how that rewards Amazon richly. And as their warehouse employees have to beg for time to use the restroom…
I’d like to be happy for them ( and me as we are always being invited to visit) but it sickens me. My other nephew ( his brother) and his wife are a music teacher and a special education teacher in PA both having to have ‘side gigs’ and who still struggle to make their mortgage payments on their small townhouse and pay daycare.
Merf56, your comment reminds me of something that’s very close to home. I’m about to publish a book, and gosh darn, I’m hearing all sorts of rhetoric about the need for my book to be on Amazon.
Well, wait just one skinny little minute.
I’d rather have book sales through my little itty-bitty website, with order fulfillment done by a local company whose name isn’t Amazon, than do business with that beast. I’ve heard stories from other author/publishers, and, quite frankly, that’s enough to convince me.
People, if you’re in business, you do not, repeat, DO NOT, need to sell through Amazon. Take a stand. Do it yourself. Turn away from the beast.
I have used Amazon no more than three times since I knew of its existence and that was to buy books required when my son started college and that the college bookstore did not carry.
We lack for nothing in not buying from Amazon!
Good for you Arisona Slim – I hope your book sells well!
Eshew it up and espit it out! Best wishes with the book. Very tough bidness.
Amazon swallowed Good Reads. I think Bezos was disappointed that a gilded age robber barron from Butte beat him to the name Anaconda.
To all the laid off tech workers….learn to mine coal.
Zero sympathy. And it is not the responsibility of Americans to worry about or even care about Indian tech workers. We need carpenters and plumbers and pizza cooks, I’m sure they will figure it out.
Lyrics By: Robert Hunter
Music By: Jerry Garcia
Red and white, blue suede shoes
I’m Uncle Sam, how do you do
Gimme five, still alive
Ain’t no luck, I learned to duck
Check my pulse, it don’t change
Stay seventy two, come shine or rain
Wave the flag, pop the bag
Rock the boat, skin the goat
Wave that flag, wave it wide and high
Summertime done come and gone, my oh my
I’m Uncle Sam, that’s who I am
Been hiding out, in a rock and roll band
Shake the hand that shook the hand
Of P. T. Barnum and Charlie Chan (note 1)
Shine your shoes, light your fuse
Can you use them old U.S. Blues
I’ll drink your health, share your wealth
Run your life, steal your wife
Back to back, chicken shack
Son of a gun, better change your act
We’re all confused, what’s to lose
You can call this song the United States Blues (note 2)
(1) on a few occasions in 1979-1980 Jerry sang “Of P. T. Barnum and the Shah of Iran” (eg Cleveland 29 Nov 1979, Oakland 13 Jan 1980).
(2) for an ironic take on this, see One More Saturday Night
(3) alternative lyrics were tried out as the song was being developed – see Wave That Flag
Two generations out, the kid’s in the Bay Area will be singing coal miner’s daughter?! No coal there, btw, gotta move to Gillette. Houses are cheap, King Coal presently on the ropes. A bit windy, but near the once sacred now profane Black Hills. Hermosa.
And in WY, the land of Freedumb, you will be required to NOT own an electric car after 2035. So there’s that…
Indeed…
https://en.wikipedia.org/wiki/Ludlow_Massacre
How are pitchfork futures doing?
bill clinton said we do not need any manufacturing jobs, we will be a knowledge based service economy, what ever that is, since service rose up to support manufacturing. most of the de-industrialization happened from 1993 on wards.
https://www.nakedcapitalism.com/2023/01/blackrock-says-were-all-doomed-its-being-optimistic.html
“For the last five decades the US has been systematically de-industrialized with no apparent plan for what else the American people might do to earn a living.”
https://www.huffpost.com/entry/jobs-multiplier_b_4002113
“We are seeing growing evidence that manufacturing supports far more jobs in other sectors than previously thought. For example, Intel Corporation has a plant in Washington County, Oregon employing 16,250 people in the design, manufacture and marketing of microprocessors. A recent study by ECONorthwest concluded that every 10 jobs at Intel supported another 31 jobs in other sectors at above average wages.”
The western world never really recovered from the dot-com pop, now did it?
It just kicked the can down the road, with Greenspan being the kicker.
Intel are also firing people but they have been cute about it and not given a number of people, rather an amount of cash ($3B) to be saved from the cuts. That could be around 10-20K employees. This approach is so as not to arouse any criticism of the money they are to receive from the chips act I would think.
The zilllionaires figure if they lay off enough workers the fed will relent and bring back zirp, then they can go back to pumping their salaries/bonuses using stock buybacks…also imagine the pain a zillionaire feels when he/she/it checks their property values on the zillow and see’s them falling? I mean, there’s always injustice in the world, but that is just not fair!
the author completely over looks the facts that france has been trying to get rid of the free trader macron, and can’t. under free trade oligarchs from all over the world, support macron, or any other blithering idiotic free trader.
even if they manage to get rid of macron, oligarchs from all over the world have another one ready to go.
no amount of money introduced to alleviate the destruction of civil society under free trade will work. that added money will inflate free trade even more. you will then see round after round of inflation, layoffs, debt, and chaos.
ya wanna civil society, get rid of free trade. otherwise accept barbarism.
Because Macron et al are framed as the moderate choice between fascist right and communist (they will take your home and car!) left.
The public do not seem to be buying the scare tactics any more, or have reached a state of desperation that make them no longer care, and are leaning more and more right (because they are “talking the straight talk”).
I have to admit I’m struggling with understanding how this works, why their stocks are increasing (if layoffs is the actual reason). If I were an investor I would ditch the stocks because:
a) the culture is clearly bad where they don’t value and nurture employees,
b) projects are being dramatically cut across the board, just shelved, therefore a company isn’t growing and investing in research, growth, improvement and quality, work in progress is now lost, the company is stagnating, where’s the value in that?
c) if a company only the previous quarter hired several thousands then in the next quarter ditched them, that doesn’t seem like a well-managed company,
d) seriously, the market is fickle and panicky and absurd and contradictory and unpredictable and they’re making key strategic corporate decisions based on the market?
e) and what to make of companies that layoff just cuz everyone else is doing it, cuz fashion
Plus, in a time when everyone else is laying off, I would see it as an opportunity to grab precious talent, bolster the ranks of my top performers. If I were an investor I’d be looking at companies that are grabbing that talent.
The author states, “We don’t have to accept such a dehumanizing economy.” The problem is that both major parties have accepted it and will go to great lengths to maintain it.
And the system makes it nearly impossible for a third alternative to rise up.
It is remarkable that all these tech companies are acting together to lay off thousands of employees at the same time. It reeks of collusion and a shot across the bow of workers who would dare to quit and move to higher paying jobs or demand to work from home. Inflation and higher interest rates appear to be mere fig leaves for applying the whip of layoffs. As regards the stock market celebrating layoffs, that train left the station when they invented the 401k and firmly joined at the hip most of the work force’s retirement dreams to the stock market. Don’t tech workers check their 401k portfolio frequently? They have to perforce believe in the stock market. If they were on company pensions and nothing else, would they care? As for the H1-Bs, I would not shed too many tears for them. Does anyone really want to weep for someone plucked from India and brought here on a H1-B visa to compete with a poor new graduate with a ton of student debt? The H1-B visa is a scam to import foreign labor under the oft repeated lament, ‘we can’t find anyone here’. This was true in the 1990s when technology was exploding on many fronts, processor advances, networking, wireless etc. Not anymore. There are more Engineers in India because education there is relatively cheap for the middle class. Professors even at top Universities do not make the kind of money the ones on tenure here in the USA make or even the non-tenured Assistant Professor variety. There is also no concept of tenure in India. The USA lacks engineers because EE or Computer Science schools are expensive. The tech industry is trying to solve this problem by the H1-B visa and also to increase the tech labor force to drive wages down. The H1-B visa is also a kind of ‘double dipping’. Consider this, companies like Google and others open technical centers in India, China, Krakow etc, so why exactly do they need to bring in workers on H1-B visas? Why can’t they grow their numbers in these countries? I would posit that the reason is, they do need a small amount of engineers here in the USA but they don’t want to pay them well ergo H1-B visas.
Tech companies, colluding, nah never. /s
https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation
Saint Steven Yobs
Yeah, seeing so many “tech bros” worship that egomaniac makes me sick.
Bold claim. I guess the passages that followed shouldn’t have surprised. I wonder if the author had similar concern for all the Americans that were unable to secure employment due to the hiring of H1-Bs instead?
Regardless, truth is, we need an employer of last resort program; It’s lunacy to expect the private sector to provision social goods. A just society ought to ensure that citizens are housed and fed. You can’t just go live off the land anymore, opt-out of capitalism; property is owned by someone somewhere. You need currency to pay for housing and food.
Which isn’t to say the private sector doesn’t have awful incentives to maximize share price and ignore negative externalities on communities, customers, and citizens. The corporate liability shield ought to be eliminated. Having a majority of labor and community representation on corporate boards ought to be the price of admission for having a corporation if you want that liability shield.
Rapacious capitalism and financialization is the end of us all.
Of course it should be recalled that tech companies went on a hiring binge during the pandemic headcounts went For example Meta (facebook) increased its headcount 28% last year alone.
https://www.axios.com/2022/10/28/big-tech-work-force-hiring-freeze-layoffs
Other tech companies also increased headcount. rapidly. In addition a lot of new projects were started such as the whole metaverse issue at meta which was costing 5 billion a year or more at meta. These projects did not meet targets just like the Alexa business at Amazon. (Which was developed on the idea that voice ordering from Amazon would be a big thing,and lost several billion over the last few years.
In any case there are fairly generous severance packages provided. And in addition there there are lots of tech job openings just not at the big tech companies. this article suggests that 79% of tech workers find a new job withing 3 months of the search.
What BS. The H1B program, and other grifts , is designed to create a labor surplus as well as to allow industry not to bother with training or apprenticeships.
With experience in the US tech industry these people could get great jobs if they go back to their home countries in India or China.
I’m an engineer and I don’t see a STEM shortage in this country. Look at job ads for engineers. You gotta have a long list of qualifications to be considered. If there is a shortage it is a shortage of their own making.
Layoffs have been a fact of life in Silicon Valley for many decades. These latest mass layoffs are not at all unusual. Back when there was a disk drive business in the Valley tens of thousands of workers lost their jobs when the entire industry moved to Asia. Few people cried about it then. In capitalist societies layoffs and other displacements come with the scenery. Deal with it.
It should be made really simple. Anytime a ceo cuts jobs his pay and that of the executive team should be cut significantly – by at least 50%. If it is necessary to reduce costs – let’s start with those whose per capita costs are the greatest burden for the company to bear. If Dems proposed having the regulators find a way to mandate this – it would net them some more votes but they are beholden to the corporations.
Calling share owners “investors” is perhaps the biggest load of crock in economics.
Unless they are still holding shares from the IPO, they got them off the secondary market. And thus not a single cent paid for them reached the company.
And yeah, publicly traded companies are some of the most risk adverse companies out there.
How is it these corporations jad so many pelople who can be laid off without affecting their operations,?
Looks like mass immigration fraud to me.
I would rather see protections so that American workers wouldn’t be displaced by cheap labor on an hb-1 rather than making some ironclad protection for that cheap labor
There are plenty of suggestions as to how to combat this business model, but few ideas for the implementation of those ideas.
I’ll go out on the proverbial ‘rotten limb’ and say what history shows. Big organizations do not change course until some ‘outside actor’ threatens their well being through violence. Often, the implicit threat of violence is enough. The “employers” have often raised up goon squads to intimidate the workers. The occasional ‘radical’ worker’s group has done the same in reverse. My go to example here is the Steel Worker’s Union bombing campaign back around the turn of the Twentieth Century. It worked. The original “rednecks,” the coal miners of West Virginia, fought an actual war with the private armies of the Coal Barons. In this regard, the United States Army was ‘rented’ out to the coal companies to militarily defeat the coal miners. This has been the standard for a long time. The upshot of this dynamic is that our hypothetical future ‘radicals’ will have to accept that they will have to fight the minions of the Organs of State Security. To engage at this level will require clandestine organizing. So, the Neo Vanguard of the Proletariat will have to be essentially both political organizers and guerrilla warfare experts.
No one said it would be easy.
I mention the above because the public is slowly becoming receptive to revolutionary ideas. This is due to the perceptible drop in the average standard of living and the visible examples of the fact that the electoral system no longer works as originally advertised. As long as the “average” citizen could reasonably hope for a better life for their children, almost any corruption could be finessed by the elites. Now that hope has been taken away and demands have been imposed.
Stay safe.
There was a time I could live just fine without a company mentioned in the article.
One of those times is right now.