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Mass layoffs loom for Silicon Valley service workers

A recent report by the trade union-aligned Working Partnerships USA organization highlights the impending threat of mass layoffs among lower-wage service workers at Silicon Valley tech companies.

Many have encouraged or instructed their white-collar software developers, engineers, and managers to work from home to fulfil social distancing guidelines. This has led toa reduction in janitorial and security requirements and a shutdown of cafeteria and shuttle transportation services. Layoffs have already begun and may accelerate.

The Working Partnerships report says tech firms in Silicon Valley’s Santa Clara and San Mateo Counties employed roughly 14,000 unionized cafeteria, janitorial and security workers, largely through private contracting agencies, before the pandemic. With skyrocketing rents in the area, these workers—whose median wage is one-sixth the median wages paid to white-collar software developers at the big tech companies—are already teetering on the verge of poverty.

It is unclear how many have already been laid off. Google, Facebook and Twitter have continued to pay the furloughed service workers or reassigned them to other duties such as receptionists at the various buildings on campus. However, many other big tech companies, including Microsoft subsidiary Linkedin, Verizon subsidiary Yahoo! and biotech giant Genentech, have laid off janitors, shuttle drivers, cafeteria workers, receptionists and security guards.

The current unemployment rate in Silicon Valley is 9.3 percent, compared to just 2 percent in a pre-pandemic month. The additional mass layoffs of tech service workers would increase local unemployment by more than 10 percent, the report noted.

The report also found:

Up to 12,000 service workers could lose health insurance coverage, along with family members who depend on the coverage.

An estimated 6,500 families with children could be at risk of being unable to pay rent.

An estimated 8,300 renters could be at risk of being unable to pay rent.
Microsoft, which laid off service workers at its Silicon Valley Linkedin office, made $14 billion in profit in a single quarter. Tesla, led by CEO Elon Musk, who just surpassed Bill Gates to become the second richest man in the world, with $127 billion—was the first to lay off blue collar service workers in April, even though it was also one of the first to restart operations in Silicon Salley in May, in defiance of County regulations.

Verizon, which laid off service workers who had been working at the Yahoo! office for several years, made over $4 billion in profits last quarter. Facebook and Google together have the same number of employees as General Motors. But the market capitalization of Facebook and Google is $1.7 trillion, about 41 times that of GM.

The biggest tech companies—Facebook, Apple, Amazon, Alphabet (Google) and Netflix—have raked in it during the pandemic, with stock prices rising over 45 percent year-to-date, hitting historic highs and producing a combined value of over $5.5 trillion. These corporations have also received billions in public subsidies and tax incentives, including at least $654 million in federal COVID-19 relief funds.

The unions that claim to represent these service workers, including the Service Employees International Union (SEIU), UNITE HERE and the Communications Workers of America (CWA), have sought to channel workers’ anger into fruitless appeals to management and the Democratic Party. UNITE HERE held a protest of laid off workers in early September outside the Yahoo! office after a round of more than 100 layoffs. On November 17, the union held another protest outside the home of Verizon CEO Guru Gowrappan. But the unions have steadfastly opposed any strike action that would quickly pit workers against the Democratic Party, which controls every level of government in California.

Some of those who were laid off as long ago as September have not received unemployment benefits as of mid-November. Erika Sanchez, a Verizon cafeteria worker at the Sunnyvale office interviewed by NBC News, was making $19 an hour or about $38,000 per year. She needs to pay rent and support her son who studies at the University of California, Berkeley. So far, she has not received any unemployment benefits. Like millions across the country, she receives her food through a non-profit and is also trying to make some money selling jewelry and cleaning homes with a friend. Read more via WSWS

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