In January of this year, the United States and Europe experienced a wave of layoffs that affected the globe.

This included major companies such as Lloyds Bank, the largest bank in the UK, European software giant SAP, German automotive parts giant Bosch, American department store chain Macy's, American e-commerce giant eBay, American denim brand Levi's, Hollywood's renowned media company Paramount, Citibank, Microsoft, and many others, all of which announced layoffs.

According to data from the layoff tracking website Layoffs.fyi, in January alone, 76 tech companies fired more than 21,000 employees, and other industries were not far behind.

At that time, economic experts attributed this wave of layoffs to the macroeconomic environment and the companies' own structural reforms.

Advertisement

How should we put this?

The economic data in the United States at that time was not bad, but the economic data in Europe seemed less impressive.

We thought that after the tumultuous wave, there would be a period of calm.

Indeed, the minor ups and downs of nearly half a year allowed the workers in Europe and America to return to a "peaceful era."

However, now it seems that for European workers, it was only half a year.

On June 7th local time, American car manufacturer Ford announced that it would lay off another 1,600 workers at its factory near the eastern Spanish city of Valencia, due to Ford's decision to stop producing the S-Max and Galaxy models at the factory.

After this round of layoffs, the factory will only have about 1,600 employees left.

It is worth mentioning that Ford had already laid off 1,100 people at the factory in March last year, which means that in one year, Ford's Valencia factory has laid off more than 2,700 people, accounting for 63% of the total employees.

Among the nearly 1,600 layoffs this time, 626 people will be "permanent layoffs," and the other 966 people will be fired.

These fired employees may be rehired when Ford's Valencia factory begins producing new cars in 2027.

However, some insiders have revealed to the Spanish media that Ford does not plan to set up a new car production line in Spain, but in the United States.

Spain is not the only "victim" of Ford's large-scale layoffs, because a month ago, two other European countries have also been greatly impacted by Ford's layoffs.

One country is Germany, with 2,300 people laid off; the other is the UK, with 1,300 people laid off.

That is to say, in these two months, Ford has laid off 5,200 people in Europe, accounting for 16% of its European employees, plus the two large-scale layoffs last year.

Ford's four major factories in Europe have laid off nearly 9,000 people, accounting for about 30% of its total European employees.

Ford's reason for the layoffs is to create a "more streamlined and competitive cost structure" in order to reduce the number of models developed for the European market, focus on the profitable van field, and accelerate the transition to electric vehicles.

A few days later, on June 12th local time, another American giant, FedEx, officially announced that in response to cost reduction strategies, the company will cut 2,000 jobs in Europe.

Unlike other American companies, FedEx's layoffs may really be a need for self-preservation.

As early as March of this year, the company's CEO, Rajesh Subramaniam, said that FedEx is expected to implement a permanent cost reduction of $1.8 billion in the fiscal year of 2024, and plans to cut another $2.2 billion in the fiscal year of 2025.

In fact, according to FedEx's CFO, John Dietrich, in a conference call on March 21st, FedEx's employee count had already decreased by nearly 22,000 people last year.

However, at that time, Europe, as one of the company's main contributors to performance, was not included in the large-scale layoff memo.

With the proposal of the two express delivery companies' strategy of automating self-research and production to replace employees this year, Europe's "immunity" has lost its guarantee.

Why?

Because the research and development base for automated equipment is all set up in the United States, and Europe has not received a share of the cake.

On the contrary, European positions have been replaced by automated equipment developed in the United States.

What is the logic behind the actions of American companies?

Some people may think it is a problem with the company's own development strategy.

There is definitely, but it seems not to be the root cause.

Some people may think it is because the American economy has negative factors.

Well, it's not.

Because just last Tuesday (June 11th), the World Bank raised the global economic growth by 0.2 percentage points, from 2.4% in January to 2.6%.

In this regard, Ayhan Kose, the Deputy Chief Economist of the World Bank, explained that "80% of the upward adjustment in the global growth outlook for 2024 is due to the upward adjustment in the economic outlook of the United States," because of the strong consumption driving force in the United States recently, the World Bank has raised the economic growth of the United States in 2024 from 1.6% to 2.5%, an increase of 56%.

That is to say, the current economic situation in the United States is not only not bad, but also very strong.

So why is that?

There is only one reason.

That is, Europeans want to take Americans as brothers, but Americans only want to be the boss themselves, and others can only be the younger brothers.

In other words, Americans seem to be on the same side with Europe, but in fact, they are always on guard against Europeans, afraid that Europe will take their hegemonic position, even if it is only in the economic field.

Some people say that since the Russia-Ukraine incident, the United States and Europe have been very close to each other, and they breathe through the same nostril.

Is it a bit much to say that they are on guard against Europe?

This question reminds me of another "puzzled" question of mine, which is "Why does the United States insist on not cutting interest rates?"

Everyone knows that due to the continuous opening of the floodgates and the sparks of the printing press during the epidemic, the United States has had relatively serious inflation after the epidemic.

In order to curb this inflation, the Federal Reserve has raised interest rates ten times in two years, directly bringing the target range of the U.S. federal funds rate to an extremely rare 5.25%~5.50%.

Originally thought that this year the United States would implement some interest rate reduction strategies to adjust and balance, but the Federal Reserve actually came out with a seven consecutive flat, and even the FOMC participants even revealed that the Federal Reserve will only cut interest rates once this year, and only by 25 basis points.

This is interesting, whether it is from inflation, unemployment rate, manager's purchasing index or GDP growth rate, the current U.S. economy is at the best level in recent years, that is to say, if there is no interest rate reduction, such a high interest rate will soon shackle economic development.

So why is the Federal Reserve still so tough?

One very important reason is to maintain a strong dollar.

From the 1990s to the present, the Federal Reserve has been able to maintain a strong dollar twice before, once is to force Japan to sign the Plaza Agreement, and want to directly knock down the too ostentatious Japanese economy at the time; the other time is during the oil war with Russia, in order to suppress Russia's oil earnings, to deplete Russia's foreign exchange reserves, and to trigger a financial crisis in Russia.

But now Japan is very obedient, and Russia has long given up the dollar as the settlement currency for oil, and with the current thousands of sanctions by the United States and Europe, there is no need for a strong currency.

So, the object of the dollar's strength is only the euro.