While many American workers are preparing for the holiday season, some are grappling with the mental and financial anguish of being suddenly laid off.
After corporations complained of labor shortages through 2021 and 2022, several companies have shed workers in mass layoffs as 2022 comes to a close.
Job cuts in the US have risen this year, with a 6% increase for the first 11 months of 2022 in comparison to last year. In 2021, 320,173 of them had been announced, though job cuts are lower in the past two years than in the previous few decades.
Driving the increase in job cuts is the tech sector, as numerous high profile tech companies, including Facebook’s Meta, Twitter and Amazon, announced mass layoffs in recent weeks.
Catalent, a pharmaceutical manufacturing contractor, recently informed employees the company is going to cut about 600 jobs in Indiana, Texas, and Maryland over the next several weeks, as demand for Covid vaccines has dropped significantly.
“Holidays are depressing enough, especially those of us who have lost most of their family and ones that suffer from anxiety and depression,” said a laid-off worker at Catalent in Bloomington, Indiana, who requested to remain anonymous for fear of retaliation from prospective employers.
The person added: “I’m 45 and have no idea what I want to do. The people that are still working are affected by this. They have to pick up the slack and they are missing the ones they worked next to. I wish they would have waited till the first of the year. Who wants to find a job or hire right before Christmas?”
Some experts see the layoffs as unnecessary.
“These companies are all making money. They are doing it because other companies are doing it,” said Stanford Graduate School of Business Prof Jeffrey Pfeffer on the recent trend of tech companies shedding employees.
“Layoffs often do not cut costs, as there are many instances of laid-off employees being hired back as contractors, with companies paying the contracting firm. Layoffs often do not increase stock prices, in part because layoffs can signal that a company is having difficulty. Layoffs do not increase productivity. Layoffs do not solve what is often the underlying problem, which is often an ineffective strategy, a loss of market share or too little revenue. Layoffs are basically a bad decision,” Pfeffer added.
Layoffs have numerous negative effects on workers who are faced with them. A study by UK researchers found a layoff to be the 7th most stressful life experience, correlated to significant increases in developing a new health condition as well as the risk of suicide, depression and substance abuse.
Other corporations have announced mass layoffs right before the holidays, claiming economic downturns have driven the cuts, even as they record profits and the economy showing no signs of a downturn. Yet, the Federal Reserve’s interest rate hikes have driven concerns that a downturn could happen soon.
Stellantis, which manufactures the Jeep Cherokee SUV, announced on 9 December the closure of an Illinois plant resulting in more than 1,200 workers being laid off by the end of February 2023. It cited increasing costs of production of electric vehicles.
“It came without the slightest bit of warning and absolutely no details. It wasn’t even a rumor so it just dropped like a bomb,” said Deanna Viel, a worker at the plant Belvidere, Illinois who was out on medical leave for knee surgery when the announcement was made.
The United Auto Workers criticised the decision to shut down the plant given the amount of government subsidies the company receives.
“We knew our future was looking bleak as we had nothing to build after the end of June but it was still a shock,” she added. “It’s basically ruined the holidays for us. No one is in the mood for it now.”
Right before Thanksgiving, about 2,700 workers at United Furniture – a company that has facilities in Mississippi, California and North Carolina – received an email notifying them they were laid off immediately.
Stephanie Watkins of Mississippi was an employee at United Furniture for about five years. She was at work at about 10:50 pm on Tuesday, 21 November, when the first companywide email was sent out. It said that no one should report to work on 22 November and that over-the-road drivers were to halt deliveries.
She described the manner in which workers were notified of the closure as “heartless”.
“We knew then something bad was about to happen. We took it upon ourselves to stop working, clocked out, and left. Exactly one hour after the first email was the last email saying all employees were terminated,” said Watkins. “I was really in shock. We tried calling our higher bosses to ask questions, and if we got any answer at all it was that they were also not aware of this kind of information.”
Facilities of RV corporation Tiffin Motorhomes sent layoff notices to dozens of workers at its manufacturing plants in Belmont and Burnsville, Mississippi, as well as in Red Bay, Alabama, at the beginning of the month, citing economic issues.
“Everything after hearing the word ‘layoff’ kind of faded out because of the struggle to come. My mind raced on what bills I could pay and which to push off further to still try to make a small Christmas happen,” said a laid-off employee who worked at Tiffin Motorhomes for several years but requested to remain anonymous for fear of retaliation.
“They do not value employees and a layoff three weeks before Christmas is pretty crappy.”