Via Workers World News Service
Reprinted from the Feb. 10, 2000
issue of Workers World newspaper
-------------------------Is there a layoff in your future?
By Gary Wilson
President Bill Clinton claimed credit for an economic miracle in his State of the Union address Jan. 27. But for many workers the miracle is that they still have a job.
On Jan. 27, Coca-Cola announced a massive layoff of 20 percent of its work force--more than 6,000 workers.
That same day, Lockheed Martin announced it is cutting 2,800 jobs in its aerospace division.
Pratt & Whitney announced on Jan. 21 that it will eliminate another 1,700 jobs. This is on top of 3,500 jobs that have been cut since 1998.
Venator Group Inc., formerly Woolworth, said on Jan. 26 that it is closing 358 stores and laying off 3,700 workers.
The merger of EMI with Time Warner's music division is expected to eliminate about 3,000 jobs.
There were dozens more layoff notices that went out in January. Many of these are in the traditional manufacturing industries.
High rate of layoffs
The last two years have set records for layoffs. According to Challenger Gray & Christmas, a firm that tracks layoffs, job-cut announcements for 1999 totaled 675,132.
That is just short of the record number of job cuts made in 1998--677,795.
Job cuts from mergers and acquisitions in 1999 reached a five-year high of 79,219, Challenger Gray & Christmas reported. In December 1999, one out of every four layoffs was the result of corporate mergers.
No record is kept of what happens to workers who lose their jobs. If they find a new job, is it in the service industries or perhaps one of the new high-tech industries? These jobs usually pay much less than manufacturing jobs, where workers often have unions to defend their rights.
The dot.com jobs in the hot new Internet companies don't just pay less. They are not immune to the vagaries of the capitalist system, either.
The Internet companies are being hit with a wave of consolidations, layoffs, mergers and acquisitions.
Here's a recent sample:
* Amazon.com, the top Internet retailer, announced Jan. 31 that for the first time since it started it will cut 2 percent of its work force, laying off 150 workers.
* High-end clothing seller Boo.com, which opened with much fanfare in November 1999, announced it is cutting its work force by 10 percent.
* Other Internet retailers announcing cutbacks were Beyond.com, Value America, Pets.com, and eToys, the third-most-visited e-commerce site on the Internet. Value America eliminated 50 percent of its work force.
Crisis of overproduction
The new Internet technologies have changed much about business. But they haven't changed the laws of capitalist economics.
The e-businesses are showing signs of capitalist overproduction. There has been a fast outpouring of new e-commerce Web sites that have made a handful of capitalist entrepreneurs rich. That's because they were able to apply the new technology to lower costs. Sales spread rapidly.
But soon, there was an excess of Web-based retailers making the same offers. Now the shakeout has begun.
It's not that the goods and services being offered aren't needed. What has happened is that there is an overproduction of e-commerce sites on the Internet.
When more goods or services are being produced than can be sold at the capitalists' desired rate of profit, a crisis of overproduction occurs. Every crisis of overproduction brings with it layoffs and the devastation associated with job loss.
One of the ways socialist economies have shown they are superior to capitalist economies is that they are able to eliminate such crises and the devastating layoffs that plague capitalism.
With all the hype about Web sales and the new Internet companies, the fact is only 2 percent to 3 percent of all retail sales are through Web stores.
A capitalist crisis of overproduction has hit this industry. The e-layoffs have begun.
This article is copyright under a Creative Commons License.
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