While GOP members of Congress wanted to pass their tax plan, they aimed to sell it on benefits for average Americans. Certainly, tax experts argued that low-income workers would hardly benefit at all. Meanwhile, anyone who crunched the numbers saw that CEOs and the richest Americans (including Donald Trump) would be the big winners.
Yet still Paul Ryan said Corporate America, which got a 40% reduction in its tax rate, would pass along its newfound riches to employees. Ryan released a statement saying his party’s plan would “create jobs, increase wages for workers, and level the playing field.”
There was one problem: The GOP tax plan provided no guarantees for workers. If a company wanted to lay off thousands of employees, “tax reform” allowed them to do it. For companies that wanted to pocket the money and boost their stock price, they could do that, too. Or they could just offshore the jobs to Asia.
Well, all those things happened. Within weeks of the tax bill passing, America’s richest corporations started laying off workers. By the third week of January, it had become a feeding frenzy, with one company saying it would lay off over 5,000 employees and use its tax cut for “restructuring.” Somehow, it doesn’t sound like a great deal for American workers.
Here are 11 U.S. companies that started firing employees right after they got their tax cut.
If you need a summary of the state of U.S. healthcare and/or employment, simply check the plans Pfizer announced in January 2018. According to Reuters, the company valued at $53 billion will cut 300 research jobs in New England.
Those employees conducted tests on drugs aimed at treating Alzheimer’s and Parkinson’s disease. Pfizer, which will continue down the usual track with drugs like Viagra, is set to save billions from Trump’s tax cuts.
Next: Trump spoke too soon about this company’s moves after the tax cuts passed.
“AT&T plans to increase U.S. capital spending $1 billion and provide $1,000 special bonus to more than 200,000 U.S. employees, and that’s because of what we did,” Trump told the nation on December 20.
That same night, hundreds of AT&T employees in Missouri learned they were being fired just in time for Christmas. Trump did not follow up with a statement on that development, but the local union president did.
“How can you lay people off and then give them $1,000 and say that there’s going to be more jobs available? I wish someone could tell me how that’s possible,” said Joseph Blanco of the Communication Workers of America Union.
AT&T continued announcing layoffs into the new year. At last count, some 4,000 people were expected to lose their jobs. A lawsuit filed in Texas will challenge the legality of over 700 layoffs in that state.
Next: This $42 billion company announced it will lay off at least 5,000 U.S. employees while closing 10 plants.
This one will affect a large number of communities. Kimberly-Clark, the $42 billion company behind Huggies diapers and Kleenex tissues, said it would shut down 10 factories and lay off up between 5,000 and 5,500 workers in 2018, the Washington Post reported on January 23. The Dallas-based company spoke in very globalist terms about the move, which affects 13% of its employees.
“We anticipate ongoing annual cash flow benefits from tax reform,” CFO Maria Henry said in a conference call. Henry added that Kimberly-Clark now had the “flexibility to continue to allocate significant capital to shareholders” during its “restructuring program.”
So shareholders will get more money while thousands of workers get pink slips. These jobs won’t come back, and businesses near the shuttered factories will feel the impact, too.
Next: One of America’s most hated corporations couldn’t help laying off hundreds of employees before Christmas.
What was a $199 billion company to do? Tax reform obviously had the votes in the GOP Congress and would pass. In Comcast’s case, the company stood to gain over $12 billion in a single year.
So the corporation quietly fired over 500 sales employees in the Southeast and Midwest, the Philadelphia Inquirer confirmed. Those cuts came right before Christmas.
Comcast said the $1,000 bonus it splashed across the news would serve as severance for the laid-off employees. However, we learned the real benefits of tax reform in the final week of January.
Comcast raised stockholder dividend payouts 21% and said it will do $5 billion in stock buybacks in 2018. Compared to the $171 million it spent on employee bonuses, the cable giant spent 30 times as much on shareholders.
Next: You knew America’s biggest employer couldn’t resist a few thousand layoffs after the tax plan windfall.
With Walmart, the country’s biggest employer, there were a couple of stories going around. First, we heard the company’s decision to raise the minimum wage for some employees and give bonuses to others. This bit of PR-bait made it all the way to the White House, and Trump celebrated. However, there was bad news that same day.
On January 11, the company abruptly closed 63 of its Sam’s Club stores, affecting thousands of employees. The company said some employees could find work in other locations; others wouldn’t. Apparently, the $313 billion company’s newfound billions could not protect a few thousand low-wage jobs.
But weren’t those wage hikes were a huge success for tax reform? “Given how low unemployment is, they would have had to hike wages anyway,” Brian Yarbrough, an Edward Jones analyst, told Reuters. “The tax bill just made that move easier.”
Next: The tech sector had a hard time weathering the storm caused by the added billions as well.
When you’re a tech giant with a market cap over $700 billion, you have to play it safe with employment levels. After all, Microsoft could repatriate $128 billion to the U.S. at discount tax rates.
None of that was enough to save “hundreds of employees” who got the axe in the final week of January. It’s almost as if corporate spending on development and workers had nothing to do with tax reform.
Next: Tax reform couldn’t save an extra 700 layoffs at this health care company.
7. Tenet Healthcare
Several strange things happened with Tenet Healthcare, a company worth billions, both before and after Congress passed the tax plan. First, the company announced it would raise the number of jobs it was eliminating from 1,300 to 2,000 employees, with several hundred coming at Detroit Medical Center. The following day, the company’s stock price began a climb that left shares up nearly 25% within two weeks.
When people warned that CEOs would simply take the extra millions from tax reform and throw it on top of the pile, they were probably referring to this type of scenario.
Next: This European company took its tax plan windfall and eliminated dozens of Indiana workers.
8. Schneider Electric
If Indiana workers didn’t like the deal Trump and Vice President Mike Pence made with Carrier, maybe they hoped for better from European company Schneider Electric. After all, foreign investors were set to pocket $70 billion in just one year under the tax plan.
Unfortunately, in yet another sign capital investment and taxes are unrelated, Schneider announced 61 workers at an Indiana facility would lose their jobs in 2018.
Next: This $204 billion company couldn’t afford to keep 53 Atlanta-area employees.
9. Coca Cola
When you hear of a company with a $204 billion market cap letting 53 employees go, you have to really worry about its state of affairs. If so, direct your concerns toward Coca Cola, the beverage giant that took its tax cut and laid off dozens of employees from a Georgia plant.
Reductions in the corporate tax rate (now way down at 20%) allow Coke executives to play with billions, but these low-wage jobs simply could not be saved.
Next: Speaking of Carrier, do you hear how many jobs the company eliminated in January 2018?
You may remember the Carrier episode from December 2016 in a few different ways. For Trump and Pence, it was a great day for America as the company got a $7 million tax break in exchange for keeping a few hundred jobs in Indiana.
Those who worked inside the plant saw it a different way: as a PR spectacle that meant nothing when it came to saving jobs.
One year later, with its corporate tax rate slashed, Carrier laid off 215 employees in January 2018. Those jobs went directly to Mexico, where workers will earn $3 per hour, Reuters reported.
Next: Dozens of employees won’t run on Dunkin’ anymore.
11. Dunkin’ Donuts
Finally, we close with Dunkin’ brands, a company with a $6 billion market cap. In total, the company said it would eliminate 40 jobs that are currently filled and leave another 40 unfilled jobs that way around the globe.
Apparently, those millions in saved taxes won’t help the company keep its U.S. employees — or fill jobs that it had staffed in the past. If we didn’t know any better, we’d say corporations didn’t think about employees when it planned what to do with their money.
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