More pain as furloughs turn into layoffs

NEW YORK • 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 last Friday, joining an increasing number of companies that are trimming their workforce after economies emerged from shutdowns.

Almost a quarter of workers in the United States that were temporarily laid off probably will not come back, according to Goldman Sachs Group 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.

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 firms.

Here are some of the largest job-cut plans announced in 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, including American Airlines cutting 19,000 workers. Lufthansa is working on more cost-tightening measures that could see another 20,000 jobs cut, a Swiss newspaper reported yesterday.

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 it brought back 17,000 of the 33,000 employees furloughed in April. However, not all the remaining workers will be able to return this year.

Walgreens Boots Alliance said it planned to cut roughly 4,000 jobs in Britain.

Coca-Cola offered early departures to 4,000 workers in North America, with more planned around the globe.

Bed Bath & Beyond will eliminate 2,800 jobs.

L Brands, which owns Victoria’s Secret, plans to cut 850 positions, while Levi Strauss wants to eliminate 700 jobs.

INDUSTRIALS

With no sign that flying will recover soon, makers of planes and engines are shedding workers. Raytheon said at the end of last month 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 chief executive Guillaume Faury said last month a plan for 15,000 job cuts was not the worst-case scenario and it would need to adapt again if a second wave emerges.

ENTERTAINMENT

MGM, the largest operator of casinos on the Las Vegas Strip, said it is sending pink slips to about 18,000 employees, more than one-quarter of its pre-pandemic US workforce.

NBCUniversal is cutting 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.

TECHNOLOGY

Salesforce.com plans to cut 1,000 jobs, sources said, while Microsoft cut fewer than 1,000 jobs.

FINANCE

With the prospect of billions in soured loans, some large European banks have said they need to cut workers. US banks, however, have largely abstained, except for Wells Fargo. Wirecard said it will eliminate more than half of its staff, or about 730 jobs, and make other “far-reaching cuts”.

Deutsche Bank’s retail unit is accelerating thousands of job cuts at its German head offices, while Standard Chartered was set to begin a new round of job cuts at the end of last month, restarting reductions put on hold at the virus’ outset.

BLOOMBERG

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