Giant retail chains are counting up their poor showings in 2013. Their answer? Store closings and layoffs. In this attack on the workers, largely underreported, both technology and capitalist overproduction play a role.
Staples is a case in point. This giant office supply chain plans to close 225 stores by 2015 — 10 percent of its worldwide retail outlets. The company had already closed 46 stores in 2013.
In 2013, Staples sold half of its $23 billion worth of items online. The store closings are to shift its business further online, but not only that. Staples annual sales dropped 5.2 percent last year and 13 percent in the fourth quarter.
Staples refuses to say how many jobs will be lost due to the store closings. But you do not have to be an economist to know that it will be in the many thousands.
Capitalist competition, technology and overproduction are at the core of these closings. Staples is in a struggle against Amazon, with its technology-intensive online business, as well as other competitors — especially Office Depot and OfficeMax. Each is in a fierce competition with the others for market share. The result is that they have opened up more stores than the market could sustain.
In the struggle against its competitors, Staples is turning toward the use of job-killing technology. In 2013, Staples bought up Runa, a Silicon Valley company in San Mateo, Calif. Runa specializes in e-commerce technology. It has pioneered ways to lock in consumers online. (techcrunch.com, Oct. 2, 2013) This high-tech job killer also specializes in getting companies “doing more with less” — doing more business with fewer workers.
Staples and its new purchase, Runa, are creating technological unemployment. But the technology/competition does not end at Staples. Amazon is able to compete with retail stores because it is a highly automated company with a growing force of advanced robots that replace workers and reduce Amazon’s labor costs.
In 2012, Amazon bought Kiva Systems, which furnished it with an army of robots, for $775 million. The robots travel back and forth from shelves to order containers, eliminating the need for a massive number of warehouse workers.
The chain of technology that drives these store closings goes from robots able to read bar codes to the Internet to e-commerce software. In shifting to online sales, Amazon, Staples and a vast number of other companies are totally profit driven. It is aimed at getting rid of workers and store facilities.
More mass store closings and layoffs
Radio Shack has announced it will close 1,100 of its 4,000 stores. The company refuses to tell how many thousands of workers will lose their jobs in this massive cutback. Sony is closing 20 of its 31 retail stores in the U.S., with 1,000 layoffs.
Best Buy announced it will lay off 2,000 “managers” by April 2014 and more layoffs are expected by the end of the year. (brightsideofthenews.com, March 2014) The category “managers” at Best Buy includes department managers and “leads,” just glorified titles for sales workers. In any case, these “managers” are going to join the army of the unemployed.
J.C. Penney announced it will close 33 stores and eliminate 2,000 jobs, thereby saving $65 million a year. Office Depot and OfficeMax are also merging, meaning more layoffs are inevitable as a result of this corporate consolidation.
Each of these giant corporate chains is driven by relentless capitalist competition. Each is closing stores and laying off workers in order to improve its “competitive position in the market.” And they are doing so by adding to the army of the unemployed, intensifying the competition among workers in general. This capitalist process uses technology to shed workers in favor of machines and software.
This is an example of how the collective activity of the corporations, each seeking its own profit advantage by shedding workers in favor of technology, further undermines the system while causing mass suffering.
The working class creates profits when it produces commodities — goods and services. But the bosses can only realize those profits when they sell those goods and services. And the working class is their mass market. So by shedding workers, the capitalists are shrinking the markets that they depend upon.
The capitalists are revealing that their system has reached a dead end when they shrink the working class, which is the source of all profit, while simultaneously trying to boost their profits.
Fred Goldstein is the author of “Low-Wage Capitalism” and “Capitalism at a Dead End.” This book and a Spanish translation are available through online booksellers.