Discover Why 135.9 Million Workers Are Furious: The Shocking Truth Unveiled!

Since 1993, the Bureau of Labor Statistics reports that 60.2 million employees with at least three years of service have been laid off. An additional 75.7 million employees with less than three years of service have also been terminated.

In total, 135.9 million workers have directly experienced the hardship and disruption caused by significant job losses.

While fluctuations in the economy can understandably lead to layoffs, many workers recognize that their job losses are often not due to simple economic cycles. Instead, these layoffs are frequently the result of corporate greed aiming to maximize profits at their expense.

Corporate Greed and Private Equity

When a private equity firm takes over a company, employees often brace for impact. Consider the 33,000 former employees of Toys ‘R’ Us, who were let go when the company was run into the ground by KKR, a major private equity firm. In 2005, KKR acquired Toys ‘R’ Us for $6 billion, financing $5 billion of the purchase through debt, which was then saddled onto the company’s balance sheet.

Simple protective measures against unnecessary widespread layoffs aren’t rocket science, even for those like Elon Musk who typically avoid labor issues.

Following the acquisition, the company began cutting costs to manage the debt, enrich KKR through substantial management fees, and ultimately lag behind competitors like Walmart and Amazon. Aliya Sabharwal, writing in the LA Times last year, reported:

After acquiring Toys ‘R’ Us, KKR and its partners liquidated the company’s real estate assets for cash and forced the retailer to lease back its properties. In the process, KKR and its co-investors collected $250 million in “management fees” and awarded large bonuses to top executives shortly before the company went bankrupt.

This type of corporate plundering by private equity firms has been occurring across various sectors since the 1980s, leading to the unnecessary loss of millions of jobs. Studies from the Becker Friedman Institute at the University of Chicago have shown that employment typically falls by 13 percent after a private equity firm acquires a public company, as Forbes highlights,

Often, private equity advocates neglect to mention that their cost-cutting strategies result in massive layoffs and lost livelihoods.

The Destructive Role of Stock Buybacks

Workers are becoming increasingly aware of the dangers posed by hedge funds purchasing company stock and demanding stock buybacks, which often precede job cuts. This was the case for 32,000 employees at Bed, Bath and Beyond, who lost their jobs as the company repeatedly financed stock buybacks until it went bankrupt and was liquidated.

A stock buyback, which was virtually outlawed until 1982, is a tactic wherein a company buys its own shares to reduce the number of shares available and increase earnings per share, thereby artificially inflating the stock price. This benefits executives, who often receive compensation in stock options, and shifts wealth to Wall Street investors.

From 2004, Bed, Bath and Beyond invested $11.8 billion in stock buybacks, temporarily boosting its share price and benefitting the investors who had pushed for these buybacks. Despite financial struggles in 2022, the company spent an additional $230 million on buybacks, adding more debt. In April 2023, it filed for bankruptcy, and by July, the last store closed.

Similarly, John Deere currently plans to move 1,000 jobs to Mexico, purportedly to stay competitive. Yet, the company is already flourishing, having reported $10 billion in profits in the 2023 fiscal year and paying its CEO $26.7 million. The true motive behind relocating jobs is to fund $11.6 billion in recent stock buybacks.

Limiting the use of mass layoffs to fund corporate and executive greed would significantly benefit the working class.

By 2025, Goldman Sachs estimates that corporations will have conducted over $1 trillion in stock buybacks, with many jobs likely to be cut to finance this transfer of wealth to the wealthiest.

Simple Solutions, Complex Political Landscape

Creating safeguards against unnecessary mass layoffs doesn’t require genius—certainly not from individuals like Elon Musk who generally avoid dealing with labor issues. Here are a few straightforward proposals:

1. The Securities and Exchange Commission should reinstate stringent limits on stock buybacks, ideally allowing them to constitute no more than 2 percent of corporate profits, as opposed to the current 70 percent.
2. Leveraged buyouts should only be allowed to include debt up to 10 percent of the purchase price, protecting employees from the consequences of excessive corporate debt.
3. Add two clauses to the $700 billion in federal funding for purchasing goods and services:
   1. No federal funds should support companies that lay off workers or engage in stock buybacks.
   2. Companies receiving federal funds should only implement voluntary layoffs, as is already the practice for many salaried positions.

Implementing these changes would vastly improve the situation for workers, though political leaders are unlikely to challenge the Wall Street interests that support them. Meanwhile, millions of workers will continue to be sacrificed for corporate profit.

When no political party is willing to confront Wall Street’s assault on workers, the only option left is for workers to establish their own political movement, much like the Populists of the 1880s. There are 135 million reasons to do so, and the need is urgent.