It seems like every week, we hear about at least one massive layoff. Recently, eBay dumped 1,000 people. That’s nine percent of its employees. Last week, Okta announced another 400 people would lose their jobs, after devastating layoffs less than six months ago.
A common explanation for this turmoil is a bad economy. But the economy is good. Despite fearmongering by some economists and politicians last year, inflation is beaten. Consumer confidence is high. People have money to spend, and they want to spend it. Even if some of last year’s layoffs were in anticipation of a recession, it’s clear now that we aren’t headed for one. Yet the layoffs keep coming.
There’s a broader, systemic cause that isn’t getting attention: we are living in a reactionary era.
The Reactionary Era
The rise of reactionary politics over the past quarter century is undeniable and has seemed to accelerate as the century grows. The authoritarian mood affects the business world, too. Corporations are quasi-feudal structures; today’s monarchs and nobility are the C-suite executives who view workers as “resources” instead of calling them peasants. Regardless of their title, autocrats crave top-down control. Executives have always resented gains made by workers, especially any that threaten their power.
Reacting to what?
Workers regained a lot of their power during the pandemic. Many learned that their jobs weren’t worth the hassle and changed direction. Others learned how vital they were to businesses and started demanding better treatment. And those who had always known they didn’t need to be in an office to be productive proved it.
With no option but to allow remote work, executives ground their teeth and chose to sacrifice control over their workers in exchange for keeping the business running. They predicted productivity would drop. Instead, it rose. While productivity dipped a little as restrictions on movement eased, that was across the board, and it soon stabilized. Remote worker productivity is at least equal to in-person productivity and often higher, but remote workers are productive on their own terms.
Executives hate that. That’s why we heard so much about mini moral-panics like “quiet quitting” and people double-dipping at multiple jobs. The effects of these phenomena, to the extent they were real at all, were marginal. But they became an excuse for executives to claw back power.
Return to Office (RTO)
It started with RTO policies. The tone was benign at first: “The office is open, why don’t you come in?” When workers declined to give up their freedom (or embrace crushing commutes), the tone shifted. We were “strongly encouraged” to return two or three days per week. Then it became mandatory. (Pity the mid-level managers who have been forced to become hall-monitors.) For some executives, two or three days are still not enough. Pressure is building for a full five-days-a-week return.
But RTO isn’t working. Workers grudgingly accept hybrid arrangements, but they know bullshit when they see it. They know there’s no reason they can’t do their jobs from home. They know that they’re often less productive in the office. And many workers are absolutely refusing expansion of return to a full week. RTO has not turned out to be an effective means of controlling workers.
Layoffs as a means of control
The technology sector has been hard hit by layoffs. So have media companies. It’s no coincidence that reporters and writers can also work as productively from home as the office.
The excuse was the threat of a recession. But all the while, corporate profits were up. Usually, you get layoffs as a means of boosting profitability. But we had layoffs even though companies were making a lot of money.
And now, the recession clearly isn’t happening. Inflation is under control. Consumer confidence is up. Last year, the U.S. GDP grew by 2.5%, the fastest growth of any other economy in the Group of 7 nations. But the layoffs keep coming.
A wealth of research shows layoffs are a terrible way to cut costs. They’re damaging to the morale and mental health of workers who keep their job. Why do executives reach for this ineffective, damaging tool again and again? Because the damage is not an unwanted side effect, but a primary goal. They’ll sacrifice a little profitability to create a culture of fear and uncertainty. Workers who view themselves as surplus easily disposed of don’t demand better conditions.
That’s what executives want more than anything: docile, obedient workers.
Conclusion
The pandemic, as horrible as it was, tilted the playing field a little in favor of workers for the first time in decades. Broader demand-side economic policies have also boosted our power. Layoffs are an attempt to weaken that new power. “Shut up and do as you’re told, or you’ll be next,” is the message coming out of the C-suites. They want workers to be afraid, so we’ll accept less than we deserve. We shouldn’t fall for it.
