TNCs: Employment is Not the Point

1 February 1999

This short piece has never been published, despite my best efforts. I think it s worth a look, if only because I can t see dozens of other people having the patience to add up all the figures for the top 100 Transnationals contained in the World Investment Report in order to make some sense out of the data. Shedding workers is a way of life for TNCs which are clearly never going to solve anyone s employment problems.
As for all the other pieces on this site, you are welcome to copy and circulate it further so long as you give the source and my TNI website address.

Every year the United Nations Conference on Trade and Development [UNCTAD] publishes the World Investment Report (1). This document invariably supplies a wealth of information concerning Transnational Corporations - at least if the reader is armed with a pocket calculator and prepared to do hundreds of sums herself. UNCTAD's authors supply no totals. Perhaps they fear that doing so might make certain facts too clear.

It is particularly instructive to examine the changes taking place among the world's top 100 firms. UNCTAD annually classes these engines of globalisation from 1 to 100, ranked according to their "foreign assets".

By comparing the data of the 1998 Report [figures for 1996] with that of the 1995 Report [figures for 1993], one
learns that during this period, the top 100 firms increased their sales by almost a quarter, without creating a single job in global terms [in fact, with 63.592 fewer employees].

The world's top 100 firms
[in billions of US $ sales and in number of jobs]


1993 1996 % Change


$ 3.335

$ 4.128

+ 24%




- 0,5%

Naturally, one must point out that the 100 corporations appearing on UNCTAD's list are not identical from year to
year, so the above figures are not strictly speaking comparable. The wave of mergers and acquisitions also makes comparisons hazardous. Furthermore, several huge Japanese trading companies are always prominent on the lists yet supply a insignificant number of jobs [commonly 8-10.000] considering their sales volume. So it is useful to leave them out; then to examine the figures sector by sector for the companies that appear on the lists in both the 1995 and 1998 Reports:


Number of TNCs concerned

Changes in sales 1993-1996, %

Changes in employment 1993-1996,%



+ 25

- 3



+ 21

- 28

Electronics, computers


+ 16


Food, beverages, tobacco


+ 20

+ 0.5



+ 24

- 15



+ 34

+ 3

Metals, mining


+ 12

- 13



+ 21

- 6

Clearly, these transnationals have been rapidly shedding employees, particularly in petroleum and chemicals and
despite impressive sales gains. A slight increase in employment [1/2 percent] is registered in the food/beverages category because fast-expanding, fast-food firms McDonald's and Pepsico hired 41% and 15% more employees respectively between 1993-1996.

For these 60 giant corporations, productivity also grew phenomenally. Each one of their employees, from the CEOs to the janitors, was responsible on average for $241.000 in sales in 1993 but for $312.000 worth in 1996 - a rise of nearly 30%.

Despite this great leap forward in worker productivity, the figures make clear that the largest TNCs still find their staff too expensive, especially in their home countries. UNCTAD divides employment provided by the top 100 TNCs into two categories: "local" [in the TNC's country of origin, all of them rich developed countries] and "foreign" [in all other countries, whether developed or "emerging"]. The displacement of jobs from the "local" to the "foreign" in the space of only four years is striking.

Changes in employment between 1993-1996

Top 100 TNCs

Change in number of jobs

Change in % terms

Jobs: local

- 927.344

- 14%

Jobs: finance

+ 863.752

+ 17%

Naturally, the same caveats on strict comparability as those mentioned above apply here; nor do UNCTAD's figures allow one to say exactly where the 14% of "local" jobs went. Still, as nearly a million jobs were lost in the "home" countries and even though some of the growth in "foreign" employment may have occurred in the rich countries, it is reasonable to assume that many of the local jobs migrated to places where salaries and benefits are well below those of the home countries.

With more than four trillion dollars in sales worldwide as of 1996, the top 100 transnational corporations now
represent over 15% of Gross World Product. This they do while employing fewer than twelve million people worldwide [although UNCTAD says they provide one to two jobs indirectly for every person employed directly]. Nowhere, except in small states like Singapore or Hong Kong, do TNCs employ directly more than one percent of the available workforce. In recent years, around three-quarters of all so-called "investment" has been devoted to mergers and acquisitions, not to "greenfield" investment;
"M and As" almost invariably result in thousands of job losses as newly merged companies restructure in an attempt to increase shareholder value. The conclusion is inescapable: It is time to recognise that, at least for the giant firms, TNC investment is negatively related to employment.


1. World Investment Report 1998, United Nations, New York and Geneva, November 1998

About the authors

Susan George

Susan George is one of TNI's most renowned fellows for her long-term and ground-breaking analysis of global issues. "How to win the Class War - The Lugano Report II" is the newest of her sixteen widely translated books. She describes her work in a cogent way that has come to define TNI: "The job of the responsible social scientist is first to uncover these forces [of wealth, power and control], to write about them clearly, without jargon... and take an advocacy position in favour of the disadvantaged, the underdogs, the victims of injustice."