International Business Machines announced Wednesday that it would cut 3,900 jobs, or 1.5 percent of its global workforce, adding to a growing list of companies announcing major job cuts. According to website layoffs.fyi, around 200 companies in the technology sector alone have announced 59,448 job cuts since the beginning of 2023.
The announcement by the 110-year-old multinational, nicknamed “Big Blue,” came after the company’s share price fell sharply on Wednesday, even though it had reported net income of $3.3 billion for 2022, beating Wall Street’s expectations surpassed. Chief Financial Officer James Kavanaugh said the company, which reduced its global workforce by 22,000 between December 2021 and December 2022, will limit hiring to “higher growth areas”.
The new cuts focus on the workers remaining on IBM’s payroll following the spin-off of the company’s Kyndryl technology infrastructure and Watson Health units. The latter entity used artificial intelligence to streamline medical treatment decisions and forged lucrative partnerships with leading cancer facilities including Memorial Sloan Kettering in New York City and the Cleveland Clinic. However, the ventures failed and in 2022 IBM sold Watson Health, which was detailed in a 2016 wealth Article as a “cautionary tale of hubris and hype”.
IBM’s job cuts followed Minnesota-based 3M’s announcement that it would cut 2,500 manufacturing jobs worldwide in response to a sharp drop in demand for its products. CEO Mike Roman called it a “necessary decision to adjust to the adjusted production volume” after the year was “slower than expected” and the outlook for 2023 was bleak, the company said Minneapolis Star Tribune.
As a result of not taking any mitigation measures against the ongoing spread of COVID-19, the company’s sales of single-use respirators are expected to fall to pre-pandemic levels this year, with an estimated half-billion dollars in lost sales.
Roman said other factors depressed sales, including “the company’s withdrawal from Russia; the slow recovery from China’s COVID-19 lockdown; “aggressive” inventory reductions by retailers; stretched hospital budgets and healthcare workforce shortages; and weak demand from industrial customers”. Star Tribune reported.
The company, which makes components for consumer electronics, was also hit by falling demand for smartphones, TVs and tablets and a continued shift from liquid crystal display (LCD) screens to organic light-emitting diode (OLED) screens.
The tech sector, which shed 153,000 jobs in 2022, remains at the forefront of the jobs massacre in the new year. In addition to the previously announced job cuts at Amazon (18,000), Google parent company Alphabet (12,000), Facebook parent company Meta (11,000), Microsoft (10,000), Salesforce (7,000) and Cloud Software Group (2,000), the music Streaming company Spotify announced on Monday that it would cut 6 percent of its global workforce this year, resulting in about 600 layoffs.
The long-running speculative bubble that sent big tech’s stock values - and the personal fortunes of their billionaire owners – to astronomical heights largely ended last year, when the Federal Reserve deliberately hiked interest rates in an attempt to push unemployment and hit back workers’ demands for wage increases needed to keep up with inflation.
In an unusually blunt article market observation wrote that the mass layoffs have fundamentally changed the relationship between management and workers in the technology industry. “It’s an employer market after years of employees having the benefit of working from home [and] more jobs with higher wages and perks,” said laid-off tech Angela Bateman market observation. “Employers assert their dominance – Disney, Google, Meta, Apple, Snap [are] Ask workers to be on site three or four days a week.”
“The Big Resignation, where technicians jumped from one high-paying job to the next, has morphed into the Big Signing.” market observation continued, citing a comment by former Cisco Systems CEO John Chambers. Eric Schiffer, CEO of private equity firm Patriarch, said tech companies are involved in “muskifying” employees and “rethinking human capital deployment,” referring to Elon Musk’s job cuts since buying Twitter in October. “We are in a cycle of contraction after years of overstaffing,” Schiffer said, adding, “There’s a lot more pain to come.”
The Fed’s policy of pushing the US economy into recession to combat workers’ wage demands is spreading to all sectors of the working class. Automaker Stellantis is pursuing further job cuts after announcing indefinite layoffs of 1,350 workers at its assembly plant in Belvidere, Illinois.
“Stellantis will indefinitely lay off nearly 100 employees from its Dundee, Michigan engine plant over the next few months,” a worker told the company World Socialist Web Site in this week. “They brought in a new plant manager and instead of sticking with the plan to lay off employees until their new line is up and running in 2024, they are opting to lay off up to 100 full-time employees indefinitely and to lay off 45 additional employees. I am an employee at the Dundee Motor Works and will most likely be one of the employees who will soon be made redundant. With the layoffs in Belvidere, most of these people will likely be permanently out of work.”
the Wall Street Journal reported that “employers are rapidly laying off temp workers, a sign that broader job cuts may be on the horizon.” In the final five months of 2022, the newspaper said, “employers shed 110,800 temp workers, including 35,000 in December, the largest monthly Decline since early 2021. Many economists see the sector as a leading indicator of future changes in the labor market.
“Temporary employment declined before some recent recessions and during the economic slowdown. Temporary workers, typically hired through recruitment agencies, are easy for companies to onboard – and fire.”
Particularly devastating is a new wave of layoffs in the healthcare industry that will only worsen conditions for nurses and other healthcare workers, who have long faced dangerous understaffing and now face rising COVID-19 infections, as well as other respiratory illnesses.
Memorial Sloan Kettering Cancer Center is laying off 337 employees “to reduce costs amid widespread financial challenges facing hospitals,” according to a U.S. Labor Department filing cited by the Becker’s Hospital Review website. The layoffs are spread across 14 New York City locations and “involve multiple departments and levels,” a spokesman for the prominent New York City cancer treatment center told Becker’s. According to the file, the workers were informed of their termination on January 17.
Based in Boston Tufts Medicine Cut 240 jobs as part of a plan to save $22 million annually through downsizing Boston globe. “Like many healthcare systems in the Commonwealth and across the country, Tufts Medicine has experienced significant financial challenges due to post-pandemic capacity constraints, reliance on more expensive contract labor, particularly in nursing, and delays in the discharge of patients for post-acute care,” a statement said from Tufts to Becker. “Although we have carefully implemented cost control measures throughout the system, we are now making the incredibly difficult decision to reduce our workforce,” the hospital continued.
Becker’s also reported on the recently announced job cuts at: St Vincent Charity Medical Center in Cleveland (978); Chillicothe, Ohio Adena Health System (69); Ascension St Vincent’s Riverside in Jacksonville, Florida (68); Visalia, California resident kaweah health (94); Based in Oklahoma City integrity health (200); Based in Toledo, Ohio ProMedica (262); Based in Las Vegas Desert Springs Hospital Medical Center (970); Pikeville Medical Center in Kentucky (112); Healthcare Southern Illinois (76); Based in Traverse City, Michigan Munson health (31); Based in West Reading, Pa health of the tower (52); Fayetteville, North Carolina Cape Fear Valley Health (200); Based in Sioux Falls, South Dakota sanford health (undisclosed), based in Cleveland university clinics (443); Ascension St Vincent Dunn in Bedford, Indiana (133).
Such cuts only demonstrate the incompatibility of social needs with the capitalist profit system. The ongoing job slaughter, coupled with the lingering effects of inflation, is driving millions of workers around the world into struggle. The struggle to defend jobs and living standards requires the establishment of grassroots committees in the hospitals, factories and other establishments, which must be linked to the struggle for the socialist restructuring of the economy based on human needs, not profit.