Thousands of employees of home improvement giant Lowe’s are out of a job as the company slashes its workforce.
Though they wouldn’t give a specific number of cuts, Lowe’s did say that those cuts would be to assemblers (the employees who put items like grills together) and facility service jobs (like janitors). The company will provide these employees transition pay. Essentially, Lowe’s will be eliminating positions not involved with sales.
Lowe’s sales have grown ahead of expectations this year, and the company received massive tax breaks from President Donald Trump’s tax plan. According to data compiled by Macrotrends, the company paid $2.04 billion in taxes in 2018, but just $1.08 billion in 2019 — a year-over-year decline of 47%. But like so many other beneficiaries of the Trump tax cuts, that money went to stock buybacks and not to expanding or supporting its workforce.
Stock buybacks help keep the economy looking good by decreasing the amount of a company’s stock on the market, thereby increasing the value of the stock already in shareholder’s pockets. This also serves to enrich executives who own heaps of a company’s stock. This is one reason the labor market is a better indicator of the health of the economy, and massive layoffs like Lowe’s, AT&T, Ford, Verizon, Walmart and those at big banks show an economy trending in a very different direction from the one Trump touts.
“The evidence continues to mount that the Trump-GOP tax cuts were a scam, a giant bait-and-switch that promised workers big pay raises, a lot more jobs, and new investments, but they largely enriched CEOs and the already wealthy,” said Frank Clemente, executive director of Americans for Tax Fairness.
Despite some behind-the-scenes problems that did hurt the company’s performance in early 2019, Lowe’s remains a major player in one of the very few retail sectors that are still holding their own against internet retail Goliath Amazon.
“In this very challenging retail landscape, we’re fortunate to be in a sector with high demand,” CEO Marvin Ellison said at a June retail conference. “We’re focused on what we call retail fundamentals.”
One of those fundamentals appears to be an aggressive policy of stock buybacks, and keeping their workforce employed appears to not be one of Ellison’s fundamentals. Ellison joined Lowe’s after his time as CEO of JCPenney failed to lead to a rebound of the troubled department store.
(Featured image: Miosotis Jade/Wikimedia Commons)
Katelyn Kivel is a contributing editor and senior legal reporter for Grit Post in Kalamazoo, Michigan. Follow her on Twitter @KatelynKivel.