Republicans promised their tax scam would benefit workers, but tech giant Qualcomm is laying off 1,500 employees while lining the pockets of its Wall Street investors.
One group that doesn’t have to worry is Wall Street investors, as Qualcomm also announced a massive stock buyback initiative. In other words, rich corporate investors are set to profit, while workers in San Diego and San Jose are out of luck.
When the Republicans passed their tax scam, it was sold as “rocket fuel” for the economy.
Two California Republicans who voted for the bill — Reps. Mimi Walters and Steve Knight — echoed those promises. Walters boasted the tax bill would “generate significant economic growth.” Knight declared it would be “a tax code that puts American families first.”
Just a couple months after the bill passed, Speaker Paul Ryan infamously boasted about a high school secretary whose paycheck had increased by $1.50 a week as evidence of the tax scam’s supposed success.
But the empty rhetoric means little to workers who will soon receive a pink slip. The layoffs — 289 in San Jose, and 1,231 in San Diego — are part of an effort by the multinational company to trim $1 billion in costs, according to CNN.
When the bill was moving through Congress, critics warned that corporations would not use the massive kickbacks from the bill to invest in workers, but would instead use the cash to enrich shareholders.
“Democratic lawmakers who have been critical of the GOP bill have claimed it would be used for such things as share buybacks to enrich shareholders, rather than for capital expenditures or improving worker pay,” CNBC noted at the time.
Qualcomm proved the critics right.
Not even a month after announcing the massive layoffs, Qualcomm announced $10 billion stock buyback plan. In its announcement, the priority of the company could not be clearer: “Consistent with our commitment to return capital to our stockholders, we are pleased that our Board has approved a new stock repurchase authorization.”
Stock buybacks are used by companies to boost the price of their stock, thus benefitting wealthy investors and executives with lucrative stock options. Rather than invest in workers, Qualcomm joins other companies in lining the pockets of investors.
“Share buybacks in 2018 have averaged $4.8 billion a day, double the pace for the same period last year, according to market data firm TrimTabs,” reports CNBC. Some pharmaceutical companies are increasing the prices of their medicine while at the same time lavishing Wall Street investors with stock buybacks.
CNN is right: “Shareholders, not workers, are far bigger direct winners from the Tax Cuts and Jobs Act of 2017.”