Most industries forced to turn furloughs into permanent cuts

The pandemic has led to many companies announcing layoffs and job cuts of their furloughed employees. The initial wave of job cuts were staved off with government stimulation packages and incentives, but with the pandemic prolonging, most government subsidies have lapsed, forcing some corporations to take the drastic step.

Recent weeks have seen a spate of layoffs being announced by the retail, beverages and the airlines industries totaling nearly 200,000 in number.

MGM Resorts International, United Airlines and Coca-Cola are the latest to announce that the furloughed employees have been let go. 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.

More than 400,000 airline workers have been fired, or furloughed.

American Airlines recently announced a cut of 19,000 workers. Lufthansa in a bid to streamline, will be laying off another 20,000, a Swiss newspaper reported.

The US retail industry furloughed more than 2 million workers amid the lockdown, out of these only 62 percent have retained their jobs that is roughly 1.3 million, says a MarketWatch report.

Cosmetics giant Estee Lauder plans to reduce its workforce by 1,500 to 2,000 jobs worldwide, or about 3 per cent of total staff.

Ulta Beauty furloughed 33,000 of its employees and has brought back only 17,000.  However, the company said most may be recalled by the end of 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 recently announced the loss of 2,800 jobs.

L Brands, which owns Victoria’s Secret, plans to cut 850 positions.

The aviation manufacturing industry has a similar tale to tell. Raytheon 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 percent target.

Airbus plans to let go of 15,000 job and a second wave may be expected soon. 

Staff at MGM Resorts across the U.S. are bracing themselves for the worst as the company readies to permanently lay off around 18,000 of its furloughed employees.MGM had furloughed 62,000 of its 70,000 employees after being forced to shut down all of its casinos in the US in March due to the pandemic.

NBCUniversal is cutting jobs amounting to 10 percent of its 35,000-person payroll.

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

Some large European banks have announced imminent layoffs.  Deutsche Bank’s retail unit is accelerating thousands of job cuts at its German head offices. US banks except Wells Fargo have not announced any cuts. Wirecard said it will eliminate more than half of its staff, or about 730 jobs, and make other “far-reaching cuts”.

In all, more than 22 million people have been either cut off or furloughed in the US. Out of these only 9 million-plus people have been retained, says the MarketWatch report.

The number of US citizens applying for unemployment aid has risen substantially. Over 1 million workers made new claims for unemployment benefits in the week of August 22, marking the 20th consecutive week that applications have risen above 1 million. More than 32 million people are currently receiving either state or federal unemployment benefits, according to the Bureau of Labor data.

But the worst has yet to come as economists warn that sizeable layoffs will likely continue and industries will continue to suffer due to the economic fallout of the pandemic in the absence of additional financial aid. 

“We think recovery in the job market will be slow,” said Nancy Vanden Houten, lead economist at Oxford Economics. “Ultimately, the recovery in the economy and the job market will depend on a medical solution to the coronavirus. In the near term, we think the lack of further federal support poses serious downside risks to the outlook.”

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