Over 200,000 job cuts globally in past few weeks herald economic pain ahead
NEW YORK (BLOOMBERG) – Global corporations have announced more than 200,000 job cuts or buyouts in recent weeks, a worrying sign that more losses will come as furloughs implemented early in the pandemic turn into permanent layoffs.
MGM Resorts International and Coca-Cola were the latest examples on Friday (Aug 29), joining an increasing number of companies that are trimming their workforce after economies emerged from shutdowns. Almost a quarter of US workers that were temporarily laid off probably won’t come back, according to Goldman Sachs estimates.
The cuts cast a shadow on the fragile rebound in the global economy at a time when Covid-19 continues to pose a threat and many government stimulus programmes have run their course. In the US, the rehiring of furloughed employees is key to further improvement in the labour market after millions of people lost their jobs at the onset of the health crisis.
The impact is widespread. Airlines were hit the earliest by a collapse in travel, and the job losses have now extended to retailers, entertainment and cosmetics companies.
Here are some of the largest job-cut plans and buyouts announced in the recent weeks:
TRAVEL AND TOURISM
As of July 24, more than 400,000 airline workers had been fired, furloughed or told they may lose their jobs in the future. More have been announced since.
American Airlines said it will cut 19,000 workers after federal payroll aid expires, rounding out a 30 per cent workforce reduction since the coronavirus pandemic began.
United Airlines expects as many as 2,850 pilot furloughs this year without approval for additional government support
CONSUMER GOODS AND RETAIL
The US retail industry furloughed more than one million workers in early April amid lockdowns. Many may become permanent. Cosmetics giant Estee Lauder, which had implemented furloughs during the shutdowns, now plans to reduce its workforce by 1,500 to 2,000 jobs worldwide, or about 3 per cent of total staff.
Ulta Beauty said this week it brought back 17,000 of the 33,000 employees furloughed in April. Not all of the remaining workers will be able to return this year.
Walgreens Boots Alliance said in July it planned to cut roughly 4,000 jobs in the UK.
Coca-Cola offered early departures to 4,000 workers in North America, with more planned around the globe.
JC Penney is cutting its workforce during its bankruptcy proceedings, with plans to close stores and reduce its workforce by about 1,000 corporate, field management, and international positions.
Bed Bath & Beyond will eliminate 2,800 jobs.
L Brands, which owns Victoria’s Secret, is preparing to cut 15 per cent of corporate jobs, or roughly 850 positions.
Levi Strauss plans to eliminate 700 jobs.
With no sign that flying will recover anytime soon, makers of planes and engines have started to shed workers. Raytheon said at the end of July that it slashed about 8,000 jobs in its commercial aviation businesses, after disclosing furloughs in May.
Boeing is preparing to offer buyouts to employees for a second time this year, extending workforce cuts beyond the original 10 per cent target unveiled in April.
Airbus’ CEO said early in July that a plan for 15,000 job cuts was not the worse-case scenario, and if a second wave of coronavirus were to emerge, the jetmaker would need to adapt again.
Live entertainment, casinos and movie theaters will also take a while to recover. MGM, the largest operator of casinos on the Las Vegas Strip, has been struggling to fill its rooms and casinos since Nevada began reopening in early June. Two of the company’s casinos, the Park MGM in Las Vegas and Empire City in New York, remain closed. On Friday, the company said it is sending pink slips to about 18,000 employees, more than one-quarter of its pre-pandemic US workforce.
NBCUniversal, a unit of Comcast, is eliminating jobs across its broadcast and cable-television businesses, movie studios and theme parks. The cuts may amount to 10 per cent of its 35,000-person payroll, the Wall Street Journal reported this month.
AT&T, whose WarnerMedia unit includes the Warner Bros studio and cable channels such as HBO, CNN and TBS, has been making its own reductions.
Salesforce.com’s CEO pledged in March that the company wouldn’t conduct any “significant” layoffs for 90 days, and he scoffed at other CEOs who wouldn’t make the same promise. The software maker plans to cut 1,000 jobs, people familiar with the situation said this week.
Microsoft cut fewer than 1,000 jobs across various teams and locations, including MSN.com and its Azure cloud division, according to Business Insider.
With the pandemic constraining commerce, many firms are facing the prospect of losing billions of dollars on soured loans. While some large European banks have said they need to cut workers, US banks have largely abstained – except for Wells Fargo & Co.
Wirecard said this week it will eliminate more than half of its staff, about 730 jobs, and make other “far-reaching cuts” to preserve cash as a Munich court opened insolvency proceedings
Deutsche Bank’s retail unit is accelerating thousands of job cuts at its German head offices after falling behind schedule during the coronavirus pandemic.
Standard Chartered was set to begin a new round of job cuts at the end of July, restarting reductions put on hold at the outset of the crisis.
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