Mass Layoffs Continue to Plague an Economy Struggling to Recover
It was not a pretty week when it comes to layoffs. Several of the country's top business organizations announced mass layoffs as leaders struggle to keep finances afloat during this unprecedented economic climate. As the third quarter came to a close on Wednesday, it was becoming more and more difficult to find companies that had not been touched on a great scale by the COVID-19 pandemic.
While a list of organizations that have been forced to enact sweeping layoffs would go on for miles, here are just a few of the nation's biggest companies that announced significant job reductions in the last few weeks alone.
American Airlines and United Airlines
It is an understatement to say that the airline industry has been hit particularly hard by the pandemic. Air travel all but grinded to a complete stop during the first few months of the crisis. While travel is slowly starting to pick back up, flight capacity levels are nowhere near normal. This was apparent in two major announcements this week.
American Airlines CEO Doug Parker announced late Wednesday that the airline is going to be forced to let go of 19,000 employees. Parker said the decision is a result of not being able to secure more federal funding. Likewise, United Airlines CEO Scott Kirby said that his airline will need to cut 13,000 jobs. Earlier in the year, Congress awarded the airline industry $25 billion in direct grants if they agreed to not cut jobs through the end of September. As this stipulation expired, the airlines were forced to significantly reduce their staffing levels to make up for severe revenue shortfalls.
Like the airlines, Disney has also been seriously affected by the ongoing pandemic. While Walt Disney World in Florida was able to open its doors in a limited capacity in July, Disneyland in California has not been given the green light by the state to resume business operations. As of August, the park shutdowns have cost the entertainment giant approximately $3.5 billion.
The company announced on September 29 that it was forced to cut 28,000 jobs from its theme park division alone. This division has more than 100,000 domestic employees. Disney said that the layoffs will affect the part-time work force the most. Josh D'Amaro, the chairman of Disney Parks, put partial blame of the layoffs on the state of California for its unwillingness to lift restrictions so that the parks could operate in some type of capacity.
The retail industry has also suffered great losses at the hands of the deadly virus. Those outlets without a strong online presence were left out to dry as malls and retail centers shut their doors. Kohl's announced last week that it was laying off 15% of its corporate workforce as a result of massive losses in revenue. According to a September 15 securities filing, the job cuts will save the company $65 million annually. The company reported second-quarter revenue losses of $3.4 billion, or 23%.
Even the oil industry has not been left untouched during the challenging economic time. On Wednesday, oil production leader Shell announced that it will let go of between 7,0000 to 9,000 people by the end of 2022. This number includes the approximately 1,500 employees who agreed to voluntary redundancy earlier in the year. For reference, Shell currently employs about 83,000 workers. As a result of the layoffs, the company is predicting a sustainable cost savings of $2 billion to $2.5 billion per year.
Energy demand has plummeted over the last few months as a result of the global lockdowns. This drop in demand has affected industries ranging from traditional coal to renewable sources.
Also this week, the Allstate Corporation said that it will reduce its workforce by 3,800 people. The cuts will come in sales, claims, and service and support roles. This figure will affect approximately 8% of the insurance company's workforce of 45,780 individuals.
Nobody can predict what will happen over the next few months. If you are in the workforce, the best thing that you can do is to prepare for the worst and brush up your resume just in case you find yourself in the market for a new job.