The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Thursday…
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Thursday related to the national and global response, the work place and the spread of the virus.
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IMMOBILIZED: Job cuts in the transportation industry have arrived this week by the thousands. The auto industry has suffered a number of setbacks, including interrupted production do to infection.
— American Airlines will cut its 17,000 management and support staff by 30%, about 5,100 jobs. Layoffs may begin in October if enough employees do not take buyout offers.
Executive Vice President Elise Eberwein said in a memo to employees that nearly 39,000 people have signed up for partially paid leave or early retirement, and the airline has extended a buyout offer to administrative staff. Laid-off workers will be paid through Sept. 30 to comply with a no-furloughs provision attached to $5.8 billion in federal aid that American is getting to help cover payroll costs.
— European budget carrier easyJet will cut up to a third of its workforce because of the pandemic. The airline has around 15,000 full-time employees — meaning some 4,500 jobs are at risk. The British carrier resumes limited service on June 15, but estimates that it may take three years to get back to 2019 demand levels.
— Nissan Motor Co. is closing its manufacturing plants in the northeastern Catalonia region in Spain, costing 3,000 jobs. The Industry Ministry in the financially strapped country are asking the Japanese automaker to reconsider. But auto sales globally are in retreat.
NOT ALL RETAIL NEWS IS BAD NEWS: There has been a wave of bankruptcies in retail and few sectors have been harder hit on the jobs front. But a number of companies have thrived, or at least survived.
— Amazon plans to offer 125,000 full-time roles to the 175,000 people it hired to help pack and ship orders at its warehouses as orders surged during the pandemic. The company said the rest of its temporary workforce may choose to stay on as part-time employees or return to the job they had before the pandemic.
— Sales at Burger King, Popeyes and Tim Hortons have improved in the U.S. and Canada since the end of March. Popeyes U.S. same-store sales rose about 40% at the end of May. Burger King’s U.S. same-sales are down slightly from a year ago but have improved since March, when they were down around 30%. Tim Hortons same-store sales in Canada were down about 20% at the end of May, an improvement from 40% declines at the end of March. Parent company Restaurant Brands International says an increase in deliveries and new family meal packs are driving sales.
— Dollar stores have become a lifeline to millions during the pandemic. On Thursday, Dollar Tree reported sales actually increased in the most recent quarter and the retail chain beat almost all expectations for sales as well. Also on Thursday, Dollar General posted a 21.7% increase in sales at established stores, topping even strong numbers from Walmart and Target.
GOVERNMENT & CENTRAL BANKS: The U.S. on Thursday reported that job losses since the beginning of the pandemic have reached 41 million. The debate over how to respond has roiled Congress. The economic toll globally will be massive.
— French unemployment claims jumped 22% in April, as 843,000 more people sought work even as the pandemic prevented companies from hiring. The jobless figures don’t include 8 million people who received government-funded temporary unemployment in April and are gradually returning to work, the national employment office said.
— Thailand says that 8.4 million people are at risk of losing their jobs this year due to pandemic, with the tourism sector being the most affected. The National Economic and Social Development Council estimated Thursday that the fall in the number of foreign and domestic tourists could mean that 2.5 million people, or 64% of the approximately 3.9 million workers in the tourism sector, could become unemployed. Another 1.5 million, or 25% of the 5.9 million person industrial workforce, could also be laid off. The jobs of 4.4 million people, or 43% of 10.3 million people working in the service sector outside of tourism, are also at risk.
MARKETS: Wall Street is moving modestly higher Thursday as a strong rally from earlier this week loses steam.
SOFT LANDING: Orders have improved “significantly” for the mattress company Tempur-Sealy as online orders surge and some stores are reopened. More people are spending more hours in beds, sometimes working, during the shutdown. Still, Tempur-Sealy expects sales this quarter to be down 30% compared with a year ago.
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