Bankruptcy and Economic Stagnation: Mass Layoffs Worldwide as Corporate Mergers near New Record
By Andre Damon
Global Research
August 16, 2015
Major transnational corporations, including Kraft, Motorola, Lenovo, Tyson and HTC have announced mass layoffs in recent days amid a boom in mergers and acquisitions, which are on track to hit a record this year.
Processed foods maker Kraft Heinz Co said Wednesday that it would cut 2,500 jobs in North America, amounting to 5 percent of its global workforce. The announcement is the result of last month’s $49 billion merger between Kraft and H.J. Heinz Co, in a deal orchestrated by Warren Buffett’s Berkshire Hathaway.
The announced layoffs will include 700 at the company’s headquarters in Northfield, Illinois, near Chicago. Thousands more layoffs are expected as a result of the deal, as the company said it was “confident” that it would meet its estimated cost savings from the merger of $1.5 billion through 2017.
On Thursday, Chinese computer maker Lenovo announced 3,200 layoffs, or 5 percent of its global workforce. The layoffs will be concentrated in the company’s Motorola Mobility subsidiary, which this week announced an initial round of 500 layoffs in its Chicago-area headquarters. Another three hundred employees will lose their jobs with the closure of the company’s facility in Plantation, Florida. Lenovo purchased Motorola Mobility from Google in 2014.
Also Thursday, Smartphone maker HTC announced that it would slash 2,250 jobs, or 15 percent of its global workforce, by the end of the year. The company is seeking to cut costs by 35 percent.
These layoffs follow last month’s announcement by Microsoft that it would eliminate 7,800 positions, mostly from its Nokia mobile phone division that it acquired in 2013. Only weeks later, San Diego-based semiconductor company Qualcomm Incorporated announced 4,700 layoffs.
Mass layoffs in the food processing and technology sector come amid an ongoing jobs bloodbath in the global energy sector. On Friday, Samson Resources Corp, a Tulsa, Oklahoma-based oil and gas producer, filed for bankruptcy, threatening over a thousand jobs. The bankruptcy follows the firm’s purchase in 2011 by private equity firm KKR & Co.
Earlier this month, Alpha Natural Resources, America’s second-largest coal producer, filed for bankruptcy, endangering the jobs of the company’s 8,000 employees. Oil consulting firm Swift Worldwide Resources reported in June that over 150,000 energy sector jobs have been lost globally since the beginning of the downturn in oil prices last year.
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