The story of mass layoffs is all too common in the constantly changing economic environment of the world. The ax has fallen indiscriminately, leaving a trail of unemployment and disillusionment, from the industrial workers of the 1980s to the Internet giants of today, including some ConocoPhillips employees. Yet what if these widespread layoffs aren't merely a natural byproduct of globalization and technological advancement? What if it's motivated by a more complex, human-driven factor?
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The Illusion of Certainty
The widely accepted narrative contends that mass layoffs are an unpleasant but unavoidable evil due to the pressures of globalization and the quick development of technology. We are informed that these layoffs, like those that have impacted ConocoPhillips employees in the past, are necessary as businesses compete in international markets and must reduce expenses to keep up with technological advancements. Unfortunately only part of this is true.
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Shareholder Capitalism
The American example illuminates a distinct narrative. As a result of the deregulation of stock repurchases in the 1980s, corporations were free to buy back their own shares, artificially boosting their value. The outcome? a situation when businesses were under pressure to generate cash flow for stock buybacks. What's the shortest way to accomplish this? Mass dismissals.
Today, stock buybacks account for an astounding 70% of corporate profits. Consequently, out of every dollar a firm makes, 70 cents go toward stock buybacks rather than employee benefits, research, or development. So who gains? Not the typical ConocoPhillips employee, but the largest shareholders and executives.
Impact on Society
Mass layoffs frequently loom in the background when large behemoths like Google, Facebook, and Microsoft, announce stock buybacks worth billions. The foundation of these businesses, the workforce, is adjusted to align with the interests of shareholder capitalism.
One example is the tale of Elon Musk's purchase of Twitter. Twitter's employment was cut in half after a debt-driven acquisition caused its debt obligations to soar. A capital-driven, rather than necessity-driven, choice was mostly paid by the workforce.
The German Model: A Glimmer of Hope
However, things don't have to be this way. The alternative is demonstrated by Siemens Energy's decision to abandon its proposed mass layoffs in Germany. They demonstrated that it is feasible for multinational firms to compete without turning to mass layoffs by placing a priority on negotiations and employee welfare.
The co-determination system in Germany, which offers employees a voice at the decision-making table, is something ConocoPhillips employees and others could benefit from. It is a model that demonstrates how power dynamics genuinely play a role in the economics of mass layoffs.
To Summarize
The idea that widespread layoffs are a natural result of technology and globalization is a smokescreen. As many ConocoPhillips employees can attest, the system that puts shareholder capitalism ahead of employee welfare is what really drives things. There are more options too, as the German example demonstrates. It's time to acknowledge the human cost of stock buybacks and promote policies that place equal importance on employees and earnings.
The widely accepted narrative contends that mass layoffs are an unpleasant but unavoidable evil due to the pressures of globalization and the quick development of technology. We are informed that these layoffs, like those that have impacted ConocoPhillips employees in the past, are necessary as businesses compete in international markets and must reduce expenses to keep up with technological advancements. Unfortunately only part of this is true.
New call-to-action
Sponsored Ad
Shareholder Capitalism
The American example illuminates a distinct narrative. As a result of the deregulation of stock repurchases in the 1980s, corporations were free to buy back their own shares, artificially boosting their value. The outcome? a situation when businesses were under pressure to generate cash flow for stock buybacks. What's the shortest way to accomplish this? Mass dismissals.
Today, stock buybacks account for an astounding 70% of corporate profits. Consequently, out of every dollar a firm makes, 70 cents go toward stock buybacks rather than employee benefits, research, or development. So who gains? Not the typical ConocoPhillips employee, but the largest shareholders and executives.
Impact on Society
Mass layoffs frequently loom in the background when large behemoths like Google, Facebook, and Microsoft, announce stock buybacks worth billions. The foundation of these businesses, the workforce, is adjusted to align with the interests of shareholder capitalism.
One example is the tale of Elon Musk's purchase of Twitter. Twitter's employment was cut in half after a debt-driven acquisition caused its debt obligations to soar. A capital-driven, rather than necessity-driven, choice was mostly paid by the workforce.
The German Model: A Glimmer of Hope
However, things don't have to be this way. The alternative is demonstrated by Siemens Energy's decision to abandon its proposed mass layoffs in Germany. They demonstrated that it is feasible for multinational firms to compete without turning to mass layoffs by placing a priority on negotiations and employee welfare.
The co-determination system in Germany, which offers employees a voice at the decision-making table, is something ConocoPhillips employees and others could benefit from. It is a model that demonstrates how power dynamics genuinely play a role in the economics of mass layoffs.
To Summarize
The idea that widespread layoffs are a natural result of technology and globalization is a smokescreen. As many ConocoPhillips employees can attest, the system that puts shareholder capitalism ahead of employee welfare is what really drives things. There are more options too, as the German example demonstrates. It's time to acknowledge the human cost of stock buybacks and promote policies that place equal importance on employees and earnings.