- The coronavirus economic freeze could cost 47 million jobs and send the unemployment rate past 32%, according to a Federal Reserve estimate.
- Hiring at many firms already has ground to a halt.
- Macy's announced on Monday it will furlough most of its employees.
Nearly 50% of companies say they are at least somewhat likely to conduct layoffs over the next three months due to coronavirus COVID-19, while more than one-third of firms (37%) say they already have instituted a hiring freeze. This comes on the heels of a Federal Reserve estimate that stated that the coronavirus economic freeze could cost 47 million jobs and send the unemployment rate past 32%.
That's from an online survey of more than 250 companies, varying in size and sector, conducted from March 20–26 by Challenger, Gray & Christmas, the oldest outplacement firm in the U.S., which works with companies on transitions services for employees. At that time the survey launched, coronavirus cases had just passed 18,000 in the U.S.; companies were advising employees to work from home; states such as California, New Jersey, Connecticut and New York had started to institute statewide stay-at-home orders; and all but nonessential businesses began shuttering. Today 27 states have now implemented stay-at-home orders, some coming after this survey period ended.
Forty-nine percent of companies told Challenger, Gray & Christmas they are very or somewhat likely to conduct layoffs in the next three months, while 11% reported they have conducted permanent layoffs; another 7% have conducted temporary layoffs.
"Millions of Americans filed for unemployment last week, so it is clear companies across the country are instituting very real and difficult cuts. Employers are wary of letting their workers go right now after fighting so hard to find and retain them during one of the tightest labor markets in recent history," said senior vice president Andrew Challenger in a survey release.
The Department of Labor reported that unemployment claims surged to a record 3.28 million last Thursday — nearly five times the country's previous high.
Fourteen percent of companies stated they have furloughed employees, while 37% reported they are very likely or somewhat likely to do so in the next three months.
On Monday, Macy's announced it would be furloughing the majority of its store-based employees as a result of widespread closures.
A $2 trillion relief bill signed by President Donald Trump last Friday aims to provide support for workers, businesses and entire industries impacted by the virus, Including onetime $1,200 payments to qualifying individuals and $350 billion for small business loans.
Some of the largest companies in the grocery- and retail-delivery sector in the U.S. are desperately searching for new employees. Amazon announced plans to hire 100,000 additional employees to meet rising demand in online ordering. Walmart and Kroger said they have each hired tens of thousands of new employees.
Forty-seven percent of firms said they are continuing to hire for open positions right now, and another 10% reported that while hiring is limited, they are hiring for critical positions.
Nearly all of the companies taking the survey (98%) have instituted a work-from-home policy, with 28% allowing all of their employees to work from home. Many states have mandated nonessential businesses to close or enable employees to work remotely. Two-thirds of companies said they are providing time-off options and additional paid time off, as well as being more flexible about workers balancing employer and personal needs.
But not all companies reported significant changes due to COVID-19 outside of work-from-home mandates. Nearly 9% said they will wait and see before taking action, while more than 6% said they would only institute changes if a presumed positive case occurs to one of their team members or a close contact of a team member.
Of the 94% of companies that have operations in multiple regions, 37% are implementing company-wide policies across the country, while over 50% are complying with individual state and metro policy.
Trump extended federal social-distancing guidelines to April 30, a reversal from his intention to begin reopening the country by Easter. "Nothing would be worse than declaring victory before the victory has been won," Trump said at a Sunday evening press briefing.
As businesses around the country attempt to constrain the virus in workplaces, experts say the resulting implementations could significantly shift the way companies and their employees operate, including a permanent rise in remote work.
"The coronavirus is going to be a tipping point," Kate Lister, president of Global Workplace Analytics, recently said. "We plodded along at about 10% growth a year for the last 10 years, but I foresee that this is going to really accelerate the trend."