Against mass lay-offs - The mass struggle of the proletariat

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Throughout 2021 banks and big businesses have announced massive layoffs that will make the already difficult living conditions of the working class even harder, aggravated by the massive loss of human lives caused by the pandemic. At the time this article was written another deadly milestone was passed when the global figure of 4 MILLION deaths from the pandemic was exceeded, and in Spain another wave of infections was taking off.

This avalanche of lay-offs is nothing new. In 1983-88, under the first 'socialist' government, ONE MILLION JOBS were destroyed, when Prime Minister Felipe Gonzalez had promised to create 800,000 jobs! In 1992-93, under the same government, there was a further wave of lay-offs. From then on, the lay-offs became permanent, implemented by the government hand in hand with the unions, the employers and the labour courts. With the crisis of 2008-2011, there were again massive lay-offs as part of cuts that eliminated numerous jobs in health and education.

For more than 40 years, the fear of losing one's job and job instability - aggravated by increasingly widespread precariousness - have been a torture that every worker has to live with, forever demolishing the myth of 'social' capitalism of a 'job for life'. All this confirms what Engels pointed out more than 170 years ago in The Principles of Communism: “The proletariat is that class in society which lives entirely from the sale of its labour and does not draw profit from any kind of capital; whose weal and woe, whose life and death, whose sole existence depends on the demand for labour – hence, on the changing state of business, on the vagaries of unbridled competition. The proletariat, or the class of proletarians, is, in a word, the working class of the 19th century”[1]

The coalition government of the Socialists (PSOE) and Podemos had promised to guarantee jobs with the ERTE[2]. THIS HAS BEEN A VILE DECEPTION: the "most progressive government in history" in combination with the employers and the trade unions is unleashing a tidal wave of job cuts by making 'temporary' lay-offs (ERTE) permanent (ERE).

The lay-offs in figures

Since 2008, 120,000 jobs have been lost in the banking sector and 2021 will mean 35000 lay-offs: 2935 in BBVA, 7400 in Caixa Bank, Bankia (still to be accounted for); 3572 in Banco Santander (the third wave of lay-offs in four years); 2717 in Banco Sabadell, 1500 in Unicaja, 750 in Ibercaja, etc.

For its part, El Corte Inglés is going to lay off 3000 workers: hard cuts for the first time in its history, as these are lay-offs without early retirement or any other attempt to soften the blow.

Ford got rid of 630 workers by, in practice, eliminating the night shift. The repercussions of these dismissals on subcontractors have not been calculated, but we can easily see the disappearance of 3000 jobs.

And that's not the end of it. The economics blog Business Insider states: “The storm of mass redundancies will go far beyond banking in 2021: the EREs of large companies in the middle of the pandemic already total more than 30,000 affected”, specifying that “since the beginning of 2021, 32 large companies have initiated ERE procedures to reduce their workforces, which will affect 30,000 workers”. Among the companies that have carried out ERE are “NH, El Corte Inglés, Adolfo Domínguez, Endesa and H&M, have announced the presentation of EREs at the end of 2020 and the beginning of 2021 despite having benefited from the ERTE regime during the previous year"[3].

Endesa, the electricity company that benefits from the excessive new electricity tariffs approved by the left-wing government, intends to lay off 1200 workers. The clothing retailer H&M plans to lay off 1100 workers, while Naturgy, an energy company that is said to be “successful” is sacking 1000 workers. Perfumery chain Douglas throws 492 into unemployment. Eurest 411, Logitravel 400, Coca Cola 360, Bosch 336, Adolfo Domínguez 300, Heineken 228, Tubacex 129, Avon cosmetics another 129 and a long etcetera.

In the case of SMEs (small and medium-sized enterprises), the effects on employment have been devastating: “small companies, those with fewer than fifty employees, ended September with almost 240,000 fewer employees than in February and with a fall of more than 260,000 in twelve months, a fall of 118,000 and 130,000 respectively in medium-sized companies, those with between 50 and 250 employees” 4

Lay-offs are not limited to Spain. They are happening all over the world. The Financial Times wrote about 30 million workers being laid off in the 25 OECD countries during the pandemic either blatantly or indirectly. This would be in addition to the 25 million jobs officially wiped out in the Eurozone and the USA during the pandemic. According to the FT, “hidden unemployment could persist, hampering economic recovery and dragging down wages and private consumption levels". It added "In the case of the eurozone, which went from an unemployment rate of 6.5% in February to 8.1% in August, ABN Amro economist Aline Schuiling says its real unemployment is at least 4 to 4.5 percentage points higher, with 1 in 5 short-time workers expected to be laid off, including those working in sectors that have fully recovered”.

ERTE and similar measures in other countries are hiding the true extent of unemployment. In total, according to Heidi Shierholz, senior economist at the Economic Policy Institute, at least 33 million workers have been hit directly, by a misclassification of their labour status, or have dropped out of the labour market or seen their working hours and wages reduced during the pandemic”. In the US, official unemployment is 7.9% but in reality, according to a former Obama advisor, it is 9.6%.

Lay-offs aren't the only attack

The working class is attacked on all fronts; the lay-offs don’t come on their own:

  • Wage cuts continue. "In 2019 the median annual salary in Spain was 18,489.7 euros, a figure that is only 20.81 euros, 0.1% up on 2018, according to the 'Wage Structure Survey' of the National Statistics Institute (INE), with data for 2019. In 2019 almost one in five workers (18.2%) earned the minimum interprofessional wage (SMI) or less, which was 12,600 euros per year, while 46.4% received a remuneration of between 12,600 and 25,200 euros. Thus, almost two out of three wage earners earned less than 25,200 euros per year in 2019, i.e. less than twice the SMI"[5].
  • Escalating poverty. “This crisis would increase the severe poverty rate (people with incomes below 40% of the median income, i.e. with less than 5,826 euros per year or 16 euros per day) from 9.2% pre-Covid to 10.86% of the population, with almost 790,000 additional people now living below this subsistence threshold, bringing the total to 5.1 million people”. Globally, recent estimates indicate that the number of people living on less than 4.50 euros a day could have increased by between 200 million and 500 million during 2020.
  • Increasingly brutal working conditions. One example is the situation of strawberry workers in Huelva, where there is a proliferation of “work and service contracts; systematic lay-offs long before the expiry of visas or what was promised; unpaid working hours; excessive charging for accommodation and basic services or the total absence of housing; lack of adequate transport between the farms and villages; lack of health care for women and men who often do not speak (good) Spanish; workplace harassment and sexual blackmail, and a long and grim et cetera."[6]
  • Pension Reform. The Socialist-Podemos coalition government is introducing another pension reform aimed at making pensions smaller and smaller and covering fewer and fewer workers. This reform is in addition to those of 1985 and 2007, all of them under “socialist” governments, and that of the conservative Partido Popular (PP) government in 2013. Under the pretext that pensions “do not lose purchasing power”, a “new mechanism” has been established that in practice devalues them. All early retirement is eliminated so that redundant workers will lose the limited financial cushion that protected them from poverty. Any attempt to retire early is heavily penalised, with up to €460 lost if you retire a year early. A later retirement age is encouraged... And, after the signing of a Government - Employers - Unions agreement, Social Security Minister Escrivá added more salt to the wounds: he announced that those born between 1960 and 1975 (who are now between 60 and 45 years old) WILL HAVE TO WORK FOR MORE YEARS WITH LESS PENSION. In other words, it makes it clear what the government wants: to continue to reduce pensions and increase the number of years worked. The question is: what will happen to those born after 1975? What pensions will those born in the 21st century have? What capital and its lackeys in the Socialist-Podemos government want is to REDUCE pensions to ZERO and INCREASE WORKING TIME TO INFINITY

From ERTE to pure and simple unemployment

ERTEs[7] are not a “social shield” against unemployment but ITS ACCELERATOR. ERTEs currently affect 743,000 workers. As Business Insider Espana points out “The Government always defended to the hilt that the ERTEs were going to be a means for restraining companies so they could avoid lay-offs. But with the first stages of the pandemic over and the economy still limping along, many large companies have already announced their intentions to cut staff. El Corte Inglés, the NH Hotel Group, the clothing chain H&M, as well as Douglas and Adolfo Domínguez, are some examples.” Ford combines the ERE (630 redundancies) with the ERTE (affecting 6100 workers until October). The steel multinational, Arcelor, proposes an ERTE as a “bridge to retirement”. All these tricks expose the demagogy of the government: the ERTEs have been the launching pad for pure and simple redundancies.

The labour courts which, according to democratic ideology, protect the worker and are an effective instrument of trade union action, do not oppose dismissals, but simply describe them as “unfair”, which means that they still happen, even if they cost the companies a little more (they have to compensate workers with 33 to 45 days per year worked).

Capital is not recovering, despite the government’s euphoric proclamations on European funds: “According to the report Perspectivas España 2021, 66% of companies will not record sales similar to those of 2019 until 2022". In the same vein, the vulnerability rate of companies (the danger of falling into insolvency) has shot up: "it is close to doubling in sectors such as hotels and leisure, where it is close to 70%, exceeds 50% in the automotive sector and is around 40% in transport and logistics, as explained a few days ago by the director general of Economics and Statistics of the Bank of Spain, Óscar Arce.”[8]

We are heading towards a worsening of the crisis with a consequent increase of unemployment in a context of skyrocketing job insecurity. This, in 2018, affected 4.35 million workers in Spain, which means 26.8% of the employed population. The pandemic “has ejected almost 300,000 young people from the labour market so far this year, in a phenomenon of job destruction that coincides with an even greater increase in those under thirty who neither study nor work.”[9]

The precariousness of work has been accompanied by the development of informal work and the system of couriers who deliver food and other goods. These were considered as "false" self-employed - i.e. “self-employed entrepreneurs” who “collaborate” with a digital platform (Deliveroo, Glovo, etc.). With the law of 2021 the “progressive” government has recognised them as “workers”. This “great victory” has allowed the delivery platforms to continue their brutal exploitation by using subcontracting and other subterfuges, counting on the government to look the other way. This lets the subcontractors pay poverty wages: “Jobandtalent offers to deliver for Glovo with salaries of 640 euros gross for 20 hours a week and with the obligation for the delivery driver to provide the vehicle. A delivery driver for JTHiring, a company subcontracted by JustEat, is paid 621 euros gross for 17.5 hours a week”.

Rebirth of workers’ combativity

The lay-offs in the banking sector have met with a workers’ response: in several banks there have been strikes for the first time in 30 years. The BBVA workers “began to mobilise in the different cities of the country, in front of the main headquarters of the bank. Then they began partial stoppages, on Tuesday 25 May for one hour and on Monday 31 May for two hours. But the main event came on Wednesday 2 June, when the bank's employees went on strike, the first strike by bank staff in 30 years. According to the unions it was backed by 70%.”[10]

There were also strikes at Caixa Bank. On 3 July there were mass demonstrations in Palma de Mallorca, Toledo and Oviedo. This desire to fight has been expressed in other sectors: on 24 June, the drivers of Autobuses Castillo went on strike against “repeated delays in the monthly payment, as well as demanding the full payment of the May salary.”[11]  In Biscay, health workers at the Ortuella hospital went on strike because of the lack of staff, demonstrating throughout the town. This movement spread to the whole of the Biscay health system with rallies in front of the provincial council demanding more new hires.

More than 38,000 temporary civil servants in Aragon have gone on strike against the “regularisation” measures that in reality condemn them to "temporary" work for life. In Huesca, other workers on short-term contracts, unhappy with the union proposal, have also gone on strike. A protest has also been staged by 18,000 civil servants in the regional administration of Castilla-La Mancha. In Torrelodones, on the outskirts of Madrid, workers in parks and gardens gathered in protest at the town hall against “the lay-offs made by the company awarded the gardening contract”. In the tile industry in Castellón 15,000 workers have been called to strike against the ridiculous wage increase and the reduction of seniority bonuses.

Workers combativity sabotaged by the unions

These struggles confirm the tendencies towards militancy that we already saw last summer[12]. However, they are very dispersed and are easily controlled and sabotaged by the unions. The unions are pursuing two objectives:

The division and isolation of the workers: locking them in the corporate prison. The unions have pushed for a separate response from the workers of BBVA and Caixa Bank. AT NO TIME HAVE THEY CONVERGED. We denounce the fragmentation and division of the struggle organised by the unions. Nothing was done to unite a common struggle with other workers. The Caixa Bank workers affected by 7400 lay-offs (final figure) went on strike two days after the BBVA strike. DIVIDE AND RULE is the slogan of capital against the workers that the unions apply conscientiously.

Accepting the redundancies. In the banking sector, the unions proposed a strike based on the acceptance of the lay-offs, “complaining” about their disproportionate number: “An argument that still does not convince the unions, who believe that the number of dismissals proposed by the bank's management is disproportionate". As Economía Digital said "In recent weeks and since 10 May, the workforce has carried out several demonstrations in front of the bank's headquarters in all cities of Spain with the aim that BBVA gets the message and chooses to reduce the number of lay-offs and improve economic conditions”. This is a defeatist approach that ACCEPTS THE LOGIC OF CAPITAL: the unions reduce everything to bargaining for A FEW LESS LAY-OFFS. This means that these “official defenders of the workers” want us to accept the worst plague of capitalism: UNEMPLOYMENT. For example, in BBVA the dismissals have been “only” 2935 against the 3800 initially announced by the company, as if those almost 3000 comrades were not being subjected to a terrible blow! As if the acceptance of the company's power to dismiss "for justified causes" was not opening the door for future dismissals!

The proletarian response

The struggle of the working class against dismissals and unemployment is particularly difficult. Workers are faced with a generalised overproduction which means that if a strike is reduced only to paralysing activity or production - as the unions want - IT IS USELESS. Unemployment - or the threat of finally falling into it – may help to reveal capitalism’s inability to secure a future for the workers,[13]  but, at the same time, it is a powerful factor of intimidation and atomisation. Capital blackmails the workers with “accept lower wages or worse working conditions or else WE WILL THROW YOU OUT”. On the other hand, when a plan for lay-offs is announced, the unions and the company make the situation stressful for workers: rumours, individual interviews, manoeuvres, division, personalised promises... “you won't be thrown out onto the street if you behave yourself” (says the company), “we'll guarantee your job if you join the union” (say the unions). Those “under 45 will not be affected”, “those over 60 should accept voluntary lay-offs”. These insidious campaigns make the atmosphere in the implementation stage of the ERE unbearable. The fear of unemployment is accompanied by a real psychological torture.

To confront this strategy requires a great effort of solidarity, comradeship, self-organisation and consciousness. All of this is very difficult and will not be achieved in a short time, given the major difficulties that the working class is currently facing[14].

However, there is no other way than struggle. In order to be strong and effective and to be able to overcome the combined manoeuvre of business - trade unions - government

  • workers need to organise themselves in general assemblies capable of electing committees recallable at any moment;
  • the struggle should not be conceived as a protest against a particular company or sector, but AS A WORKING CLASS RESPONSE.

Both requirements are indispensable because the workers of BBVA, of Arcelor, of Ford, of the hospitals, ARE NOT FACING AN ISOLATED EMPLOYER but THE ENTIRE CAPITALIST STATE which is an apparatus formed by government, employers, unions, courts, police etc. And they do not have “public opinion”, local politicians or “the community” as allies. These are not allies but instruments of the capitalist state to divert workers on to the terrain of interclassism, community action, democratic protest. The proletariat must fight and organise as a CLASS and seek the solidarity of all workers.

"Today, the historical perspective remains completely open. Despite the blow that the Eastern bloc’s collapse has dealt to proletarian consciousness, the class has not suffered any major defeats on the terrain of its struggle. In this sense, its combativity remains virtually intact. Moreover, and this is the element which in the final analysis will determine the outcome of the world situation, the inexorable aggravation of the capitalist crisis constitutes the essential stimulant for the class’ struggle and development of consciousness, the precondition for its ability to resist the poison distilled by the social rot. For while there is no basis for the unification of the class in the partial struggles against the effects of decomposition, nonetheless its struggle against the direct effects of the crisis constitutes the basis for the development of its class strength and unity. (...)

Unlike social decomposition which essentially effects the superstructure, the economic crisis directly attacks the foundations on which this superstructure rests; in this sense, it lays bare all the barbarity that is battening on society, thus allowing the proletariat to become aware of the need to change the system radically, rather than trying to improve certain aspects of it.

However, the economic crisis cannot by itself resolve all the problems that the proletariat must confront now and still more in the future. The working class will only be able to answer capital’s attacks blow for blow, and finally go onto the offensive and overthrow this barbaric system thanks to:

  • an awareness of what is at stake in the present historical situation, and in particular of the mortal danger that social decomposition holds over humanity;
  • its determination to continue, develop and unite its class combat;
  • its ability to spring the many traps that the bourgeoisie, however decomposed itself, will not fail to set in its path."[15]

C. Mir 9-7-21


[1] Engels, The Principles of Communism

[2] ERTE = Expediente de Regulación Temporal de Empleo. In theory this 'benefit' gives workers that have been laid off 70% of their wages, in practice it can be as little as 40% and is further reduced after 6 months.