The drive of capitalists to maximise their profits in the conditions of acute economic crisis has led to massive job losses around the world.
Tens of hundreds of workers in the technology industry world-wide have lost their jobs this year. Nearly 40,000 workers have been thrown out of work by the big tech companies, including Apple, Google, Microsoft and Amazon. Many of these companies experienced a drop in earnings in April-June 2022, and they responded by firing many workers from their jobs. Layoffs range from hundreds in start-ups to mass layoffs in the giant tech companies.
Generally, the pattern is a freeze on hiring, then a cutback on compensation, followed by layoffs. These moves have made the workers in the Tech industry extremely insecure. In several cases, employees have just received video messages from HR departments informing them that they do not have their jobs in the company from that moment.
None of the companies that have implemented such layoffs admit to them. They couch these moves in deceptive jargon. A spokesperson for Microsoft is reported to have said that his company is “making sure the right resources are aligned to the right opportunity”. The reality is that entire teams of workers in certain divisions have been thrown out of work.
Investment banking is another economic sector that has shown signs of impending mass layoff of workers. Post Covid it was expected that there would be a resurgence in economic activity. Investment banks anticipated a big jump in brokerage and commissions from trading (in the stock market) and deal-making (managing mergers and acquisitions). However, by August 2022, the investment banks began anticipating more than a 30-35% year-on-year decrease in revenue for the second quarter July-September 2022.
The first response to falling revenue at investment banks is to pay people less. But if revenue levels are permanently reduced, these banks will take the next step of cutting staff.
In India, the big layoffs have been seen in the education technology (Edtech) companies. They began in January this year, when Lido Learning announced its closure and asked it’s nearly 2000 employees to start looking for jobs.
Edtech companies sell e-learning programs for students in school starting at age four, all the way to training high school students for competitive exams. Such companies grew rapidly both in number and size during the Covid 19 pandemic.
However, with the resumption of classroom teaching at all levels, there is fierce competition among them. This has led to reduced sales and income. Among the top 10 Edtech companies, several including Unacademy, Vedantu and Byju’s have begun laying off employees under the cover of “regular appraisal process and re-evaluation”. Byju’s alone is reported to have laid off 1500-2000 employees since June.
Three years ago, Edtech companies in India were being hailed as the largest job creators, especially for the youth. But today, they are responsible for the highest number of layoffs of mostly youth in the country.
Politicians of the ruling class keep repeating promises of creating adequate jobs for the youth of our country. They hide the truth that capitalism is incapable of productively employing the available labour force. As finance capital moves from one industry to another in search of maximum profits, it leaves behind a trail of destruction. Branches of the economy which emerge as major creators of employment at a particular time turn into the biggest destroyers of jobs when the rate of profit declines. This is inevitable as long as production, investments and employment are all driven by capitalist greed and not by what society needs.