Furlough: a temporary leave from work that is not paid and is often for a set period of time.
The term has become increasingly prevalent over the last few weeks as the coronavirus spreads across the U.S., bringing the economy to a halt. The list of companies that have announced furloughs is too long to list here, but the total number of employees affected is already, at a minimum, in the hundreds of thousands.
This week has seen a slew of major retailers announce furloughs as malls and shopping centers remain closed. The numbers are staggering. Macy's is furloughing a majority of its 130,000 employees, while Kohl's is furloughing about 85,000 of its 122,000 employees. J.C. Penney is furloughing most of its 90,000 employees, Gap is furloughing 80,000 employees, and Neiman Marcus is furloughing most of its 14,000 employees. These five retailers alone account for roughly 400,000 employees who have been furloughed.
With retailers closed, the already struggling mall sector is furloughing employees as well. Simon Property Group, the largest mall operator in the U.S., is furloughing about 30% of its workforce. Simon, which has about 4,500 employees, has also already laid off an undisclosed number of employees. Simon is facing bigger problems, though, as some tenants look increasingly unlikely to pay rent amid the shutdown.
Employees in the hospitality and tourism industry have also been hit hard. Marriott, the largest hotel company in the world, furloughed two-thirds of its nearly 180,000 employees globally. Likewise, Hyatt and Hilton also announced significant furloughs. Even SeaWorld announced it will furlough roughly 90% of its nearly 20,000 employees.
The furloughs are even hitting the arts and humanities. Carnegie Museums of Pittsburgh and the San Francisco Museum of Modern Art both announced significant furloughs. The Utah Symphony, Utah Opera and even the National Symphony Orchestra, despite the Kennedy Center receiving $25 million in aid last week, announced furloughs.
A handful of the companies that have ramped up hiring have struck deals to help furloughed employees find work. CVS is offering furloughed employees from Hilton and Marriott the opportunity to join the company. Kroger struck a similar deal with food distributor Sysco to provide employment to furloughed employees. Going this route is beneficial by enabling these companies to fast track hiring and lend a hand to employees of companies that they have existing relationships with.
The furloughs are sparing very few industries as the coronavirus takes its toll on the economy. As long as the economy remains at a standstill, these headlines are likely to become more common.
Worst first quarter ever. As the first quarter came to a close yesterday, it officially ended the worst first quarter for the U.S. market in history. The Dow Jones Industrial Average, S&P 500 and Nasdaq fell 23.1%, 20% and 14.2%, respectively, for the quarter. The Dow had its worst quarter since 1987 while the S&P 500 had its worst quarter since 2008. The Dow and S&P 500 had daily moves of at least 1% in 21 of 22 trading days in March.
They're checking temperatures. Walmart will begin taking its employees' temperatures before they begin their shifts to prevent those who have the coronavirus from working. Employees with a temperature of at least 100 degrees will be told to go home until they go three days without a fever. Employees who report to work but are sent home will be still be paid. "Many associates have already been taking their own temperatures at home, and we’re asking them to continue that practice as we start doing it on-site," Walmart said.
That doesn't sound good. The International Monetary Fund believes some banking systems across the world may need to be recapitalized or restructured as a result of the coronavirus' effect on the economy. "Pressure on the banking system is growing and higher defaults on debt are imminent. And many now expect a shock to the financial sector similar in magnitude to the 2008 crisis," the IMF wrote in a blog post. "It might get worse ... Under more severely strained circumstances, we will have to rethink our playbook substantially. Some banking systems might have to be recapitalized or even restructured."
Amazon axes employee. Amazon has fired Chris Smalls, the employee who organized a strike at the company's Staten Island warehouse. Amazon said Smalls was fired after he "received multiple warnings for violating social distancing guidelines." Smalls responded saying, "Amazon would rather fire workers than face up to its total failure to do what it should to keep us, our families, and our communities safe."
Consumers losing confidence. U.S. consumer confidence tumbled this month as a result of the coronavirus, falling to 120 from 132.6 in February, according to The Conference Board. "The intensification of COVID-19 and extreme volatility in the financial markets have increased uncertainty about the outlook for the economy and jobs. March’s decline in confidence is more in line with a severe contraction – rather than a temporary shock – and further declines are sure to follow," Lynn Franco, senior director of economic indicators at The Conference Board, said.