Topline: As the coronavirus pandemic wipes out markets, closes schools and colleges, suspends major conferences, sports leagues and cultural events as well as upends the travel industry, businesses losing out on cash flow have started laying off workers.
Here’s who’s axed staff so far:
- Workers at President Trump’s hotels—160 in Washington, D.C., 51 in New York City and an unknown number at his Las Vegas, Nevada location—were laid off.
- Over 1,200 workers were laid off from OTG, which staffs restaurants and stores in New York City’s LaGuardia International Airport and John F. Kennedy International Airport, along with New Jersey’s Newark International Airport.
- Workers have also been laid off from Philadelphia International Airport, Orlando International Airport, and Baltimore-Washington International Thurgood Marshall Airport.
- Over five dozen workers were laid off Friday from West Virginia’s Oglebay Resort and Conference Center.
- Hollywood talent agency Paradigm laid off around 100 employees and reduced payroll for the remaining 500.
- Air Canada will lay off 5,100 members of its cabin crew, about half of its current roster, as its planned flights for April have been cut by nearly 80%.
- Montreal-based circus producer Cirque du Soleil will lay off 4,679 people—95% of its staff.
- The Metropolitan Opera, considered the U.S.’ largest performing arts organization, on Thursday laid off its union employees, including its chorus singers and musicians.
- The International Alliance of Theatrical Stage Employees, IATSE, estimated that 120,000 jobs for film workers, including technicians, artisans and other crew positions have been eliminated.
- Bon Appetit Management Company, a retail dining employer for college campuses, laid off 140 workers from the University of Pennsylvania.
- Marriott International, the world’s largest hotel company, said tens of thousands of hotel workers will be furloughed, and will lay off a number of those workers.
- Danny Meyer’s Union Square Hospitality Group on Wednesday laid off 2,000 workers, which is 80% of its workforce.
- Pebblebrook Hotel Trust, which owns 54 hotels, laid off half of its 8,000 workers and may need to cut an additional 2,000.
- Compass Coffee, a Washington, D.C. Starbucks competitor, on Tuesday laid off 150 of its 189 employees—equaling 80 percent of its staff.
- Eatwell DC, a District of Columbia-based restaurant group, let go of 160 employees over Sunday and Monday.
- Minnesota-based cabinetmaker Wayzata Home Products had to lay off its entire 141 person staff.
- Laura Ashley, the British homewares and bedding maker, filed for administration (the U.K.’s version of bankruptcy) Tuesday, after rescue talks were impeded by the coronavirus outbreak.
- Dixons Carphone, a second British retailer that sells telecom and electrical goods and services, laid off 2,900 workers Tuesday.
- New York City bookseller McNally Jackson, which operates four locations, temporarily laid off its employees due to the outbreak, but intends to hire them back “as soon as we can,” according to the company’s Instagram account.
- Portland, Oregon-based bookseller Powell’s Books, which operates five locations, said some of its layoffs would be permanent and that it would take several months for normal operations to be restored.
- Stena Line, a European ferry operator, announced Monday that 950 jobs would be cut in Sweden due to a sharp decline in travel bookings.
- The Circuit of the Americas, an Austin, Texas-based concert, automobile racing, conference and entertainment complex, said Monday it was laying off an undisclosed number of workers after being indefinitely closed due to coronavirus.
- Scandinavian Airlines said Sunday it will temporarily lay off 10,000 employees, equal to 90% of their staff,
- MGM Resorts said Friday it would furlough workers and begin layoffs on Monday, but immediately let some staffers go from undisclosed parts of its business.
- The Las Vegas Review-Journal reported that Caesars Entertainment Corp. has also begun coronavirus-prompted layoffs.
- Kimpton Hotel Aventi in Manhattan, owned by the InterContinental Hotels Group, reportedly laid off 40 employees, while the Ian Schrager-owned Public temporarily laid off an undisclosed number of workers.
- SoftBank-backed Oyo Hotels laid off 3,000 of its China employees earlier in the month, equaling 30% of its workforce there, part of a global layoff of 5,000.
- Norwegian Air said Thursday that it would temporarily lay off up to 50% of its workforce, meaning 7,300 workers, and suspend 4,000 flights due to the pandemic.
- Scandic, the largest hotel operator in Europe’s Nordic countries, also said Thursday it would give termination notices to 2,000 Swedish employees.
- At least 50 employees of music and culture festival South By Southwest were let go after this year’s event was canceled, the Washington Post reported.
- Union leaders at a General Motors plant in Ontario, Canada have recommended a two week layoff due to concerns over the virus.
- The Port of Los Angeles let go of 145 drivers after ships from China stopped arriving.
- Christie Lights, an Orlando, Florida, based stage lighting company, laid off 100 employees.
- HMSHost, a Seattle, Washington, global restaurant-services provider said it would lay off 200 people and an area corporate shuttle service would lay off 75, HuffPost reported, while an area hotel chain eliminated an entire department, according to the Post.
- Travel agencies in Los Angeles, California, along with Atlanta, Georgia, had to let employees go as the pandemic battered their industry.
- Aid workers in Las Vegas are reportedly seeing a surge in requests for food assistance and other help as events and trade shows get canceled.
What to watch for: If any U.S. airlines end up laying off workers. Delta Airlines said Tuesday it was cutting flights and freezing hiring. American Airlines is also cutting flights, and delaying trainings for new flight attendants and pilots.
5 Tips For SMEs To Counter The Covid-19 Crisis
It was recently reported by ratings agency S&P Global that the coronavirus outbreak has plunged the world into a recession. On the home front, a sudden surge in COVID-19 cases in the country resulted in the President of South Africa imposing a 21-day country-wide lockdown, starting from Thursday, 26 March 2020. Combine this with the fact that the country also recently announced to be in its third recession since 1994 it’s safe to say that many businesses are beginning to feel the effects of the pandemic.
The impact of the coronavirus on small businesses is likely to be substantial, especially for local businesses who are already feeling the pinch, as financial and market uncertainty can easily translate into an emotional crisis that can overwhelm our systems. However, help is on the way as the Department of Small Business Development announced that a Debt Relief Fund has been set up to assist small, medium and micro enterprises impacted by COVID-19.
While this relief is welcomed, it is still vital for leaders to step up. The world has been through crises before, but during these significantly difficult times, the economic impact may be as severe or possibly worse. As such, those in leadership positions must use past crises as examples and apply what was learnt to keep the country on course and minimise the impact of the pandemic.
Karl Westvig, CEO at Retail Capital, has pinpointed the visible areas that are affected and outlined a few pointers to help small business owners weather the storm.
The first victim of panic is liquidity – banks, asset managers and funders stop lending. When they cannot calculate the potential risk, they will not lend. Therefore, it is critical to shore up cash by drawing down on available facilities and suspending any unnecessary investments. Reduce expenses and manage cash flow daily.
Get Your Best Team on It
When a business is growing, we tend to shift our best people into roles linked to growth and new initiatives. In a crisis, these people need to move into the highest priority roles. These roles would include collecting from customers, raising facilities or engaging key clients.
Morale and Communication
People need leadership. This would include authentic and regular communication about the situation, what the business requires and how this will be achieved. You can’t control the circumstances, but you can control the response and actions. This will create more certainty.
Events evolve quickly and every day is critical. Leaders must be hands-on. They have to be in touch with customers, suppliers, funders and staff. They have to collect data on everything – the mood, the financial metrics, even customer stories. Some of the best information is anecdotal, not just big data.
It’s tough to lead when you don’t understand all the underlying levers. These can change in a crisis. What worked in a stable environment can go out of the window in an instant. The best approach is to start again, listen to customers and then adapt your policies within your framework.
“This is not a manual on how to handle the current crisis, but hopefully, the points mentioned above can add to what you are already doing. In simple terms, it is easy to be overwhelmed, so tackle a few things very quickly and with commitment. This will create certainty and lead to action. The alternative is paralysis,” concludes Westvig.
Moody’s Downgrades South Africa To Junk
Credit ratings agency Moody’s has downgraded South Africa to junk status on day 2 of the country’s nationwide lockdown.
President Cyril Ramaphosa’s economic reform plans have been slowed by the coronavirus pandemic. The downgrade adds salt to injury for South Africa as it currently struggles with a recession it slipped into in early March.
“The unprecedented deterioration in the global economic outlook caused by the rapid spread of the coronavirus outbreak will further exacerbate South Africa’s challenges” said Moody’s.
What You Need To Know About AfDB’s $3 billion “Fight COVID-19” Social Bond
Landmark transaction, largest Social bond transaction to date in capital markets
Abidjan, Côte d’Ivoire, 27 March 2020 – The African Development Bank (AAA) has raised an exceptional $3 billion in a three-year bond to help alleviate the economic and social impact the Covid-19 pandemic will have on livelihoods and Africa’s economies.
The Fight Covid-19 Social bond, with a three-year maturity, garnered interest from central banks and official institutions, bank treasuries, and asset managers including Socially Responsible Investors, with bids exceeding $4.6 billion. This is the largest Social Bond ever launched in international capital markets to date, and the largest US Dollar benchmark ever issued by the Bank. It will pay an interest rate of 0.75%.
The African Development Bank Group is moving to provide flexible responses aimed at lessening the severe economic and social impact of this pandemic on its regional member countries and Africa’s private sector.
“These are critical times for Africa as it addresses the challenges resulting from the Coronavirus. The African Development Bank is taking bold measures to support African countries. This $3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,” said Dr. Akinwumi Adesina, President of the African Development Bank Group.
The order book for this record-breaking bond highlights the scale of investor support, which the African Development Bank enjoys, said the arrangers.
“As the Covid-19 outbreak is dangerously threatening Africa, the African Development Bank lives up to its huge responsibilities and deploys funds to assist and prepare the African population, through the financing of access to health and to all other essential goods, services and infrastructure,” said Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole CIB.
Coronavirus cases were slow to arrive in Africa, but the virus is spreading quickly and has infected nearly 3,000 people across 45 countries, placing strain on already fragile health systems.
It is estimated that the continent will require many billions of dollars to cushion the impact of the disease as many countries scrambled contingency measures, including commercial lockdowns in desperate efforts to contain it. Globally, factories have been closed and workers sent home, disrupting supply chains, trade, travel, and driving many economies toward recession.
Commenting on the landmark transaction, George Sager, Executive Director, SSA Syndicate, Goldman Sachs said: “In a time of unprecedented market volatility, the African Development Bank has been able to brave the capital markets in order to secure invaluable funding to help the efforts of the African
continent’s fight against Covid-19. Not only that, but in the process, delivering their largest ever USD benchmark. A truly remarkable outcome both in terms of its purpose but also in terms of a USD financing”.
The Bank established its Social Bond framework in 2017 and raised the equivalent of $2 billion through issuances denominated in Euro and Norwegian krone. In 2018 the Bank was designated by financial markets, ‘Second most impressive social or sustainability bond issuer” at the Global Capital SRI Awards.
“We are thankful for the exceptional level of interest the Fight Covid-19 Social Bond has raised across the world, as the African Development Bank moves towards lessening the social and economic impact of the pandemic on a continent already severely constrained. Our Social bond program enables us to highlight our strong development mandate to the investor community, allowing them to play a part in improving the lives of the people of Africa. This was an exceptional outcome for an exceptional cause,” said Hassatou Diop N’Sele, Treasurer, African Development Bank.
Fight Covid-19 was allocated to central banks and official institutions (53%), bank treasuries (27%) and asset managers (20%). Final bond distribution statistics were as follows: Europe (37%), Americas (36%), Asia (17%) Africa (8%,) and Middle-East (1%).
Press Release by the African Development Bank
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