As many American workers prepare for the holiday season, some struggle with the mental and financial anguish of being suddenly laid off.
After companies complained about labor shortages in 2021 and 2022, several companies have made massive layoffs as 2022 comes to a close.
US job losses are up this year, with a 6% increase for the first 11 months of 2022 compared to last year. By 2021, 320,173 had been announced, although job losses over the past two years have been lower than in previous decades.
The surge in job losses has been driven by the tech sector as numerous high-profile tech companies, including Facebook’s Meta, Twitter and Amazon, have announced mass layoffs in recent weeks.
Catalent, a pharmaceutical manufacturing contractor, recently informed employees that the company will cut about 600 jobs in Indiana, Texas and Maryland in the coming weeks as demand for Covid vaccines has fallen significantly.
“Vacations are depressing enough, especially those of us who have lost most of our family and those who suffer from anxiety and depression,” said a laid-off Catalent employee in Bloomington, Indiana, who requested to remain anonymous for fear of retaliation from future employers.
The person added: “I am 45 and have no idea what I want to do. The people who are still working are affected by this. They have to pick up the slack and they miss those they worked alongside. I wish they had waited until the first of the year. Who wants to find a job or hire someone just before Christmas?”
Some experts say the layoffs are unnecessary.
“These companies all make money. They do it because other companies are doing it,” says Prof. Jeffrey Pfeffer of the Stanford Graduate School of Business about the recent trend of technology companies laying off employees.
“Layoffs often don’t lead to cost savings as there are many instances where laid-off workers are rehired as contractors, with companies paying the contracting company. Layoffs often don’t lead to higher stock prices, in part because layoffs can be a signal that a company is struggling. Layoffs do not increase productivity. Layoffs do not solve what is often the underlying problem, which is an ineffective strategy, loss of market share or too little turnover. Layoffs are actually a bad decision,” Pfeffer added.
Layoffs have numerous negative consequences for employees who face them. A study by British researchers found that being laid off is the 7th most stressful life experience, correlated with a significant increase in developing a new health condition, as well as the risk of suicide, depression and substance abuse.
Other companies have announced mass layoffs just before the holidays, claiming the economic downturn was to blame for the cuts, even though they are making profits and the economy shows no signs of a downturn. Still, the Federal Reserve’s rate hikes have raised concerns that a downturn could be imminent.
Stellantis, which produces the Jeep Cherokee SUV, announced on Dec. 9 the closure of a plant in Illinois, laying off more than 1,200 workers by the end of February 2023. It mentioned rising production costs of electric vehicles.
“It came without the slightest warning and absolutely without details. It wasn’t even a rumor, so it hit like a bomb,” said Deanna Viel, a worker at the Belvidere, Illinois plant, who was on medical leave for knee surgery when the announcement was made.
The United Auto Workers criticized the decision to close the plant given the amount of government subsidies the company receives.
“We knew our future looked bleak as we had nothing left to build after the end of June, but it was still a shock,” she added. “It actually ruined the holiday for us. Now no one cares.”
Just before Thanksgiving, about 2,700 employees of United Furniture — a company with offices in Mississippi, California and North Carolina — received an email saying they were being fired immediately.
Stephanie Watkins of Mississippi worked at United Furniture for about five years. She was at work at about 10:50 p.m. on Tuesday, November 21, when the first company-wide email was sent. It stated that no one was allowed to report to work on November 22 and that drivers on the road had to stop deliveries.
She described the way workers were notified of the closure as “heartless”.
“We knew then that something bad was going to happen. We took it upon ourselves to stop working, clocked out and left. Exactly one hour after the first e-mail was the last e-mail stating that all employees had been laid off,” said Watkins. “I was really shocked. We tried to call our superiors to ask questions, and if we got an answer, it was that they weren’t aware of this kind of information either.”
Facilities of RV company Tiffin Motorhomes sent out layoff notices to dozens of workers at its plants in Belmont and Burnsville, Mississippi, as well as Red Bay, Alabama, at the beginning of the month, citing economic problems.
“Everything after hearing the word ‘resigned’ kind of faded because of the struggle to come. I thought about which bills I could pay and which ones I should put off further to try and make a little Christmas happen,” said a fired employee who worked at Tiffin Motorhomes for several years but asked to remain anonymous for fear of retaliation.
“They don’t value employees and a layoff three weeks before Christmas is pretty worthless.”