Company layoffs snowball as recovery appears elusive3 min read . Updated: 10 May 2020, 05:41 PM IST
GE, Airbnb, Uber announced thousands of job cuts this week; ‘Our entire workforce...will have to be smaller than it is today’
Corporate America unveiled another wave of job cuts and warned of additional reductions, as executives signal they are resigned to a lengthy coronavirus-induced economic downturn.
This past week, General Electric Co., Uber Technologies Inc. and Airbnb Inc. said they would lay off thousands of workers. MGM Resorts International warned that some of the 63,000 employees it has furloughed may be let go permanently starting in August. Aerospace supplier Raytheon Technologies Corp., job-listings site Glassdoor and United Airlines Holdings Inc. also said in the past week that they had reduced jobs or planned to do so.
“Our airline—and our entire workforce—will have to be smaller than it is today," Kate Gebo, United’s executive vice president of human resources, wrote in a recent memo to employees about the company’s plans to potentially trim at least 30% of managers and administrative staffers starting in October. Other carriers are expected to reduce staff as demand for air travel remains historically low.
The burst of job-cut announcements two months after officials moved to shut the economy to halt the spread of the coronavirus indicates many companies are bearing down for a sustained slowdown as the economy searches for traction. Some are also using the moment to accelerate strategic shifts. In April, payrolls fell by a record 20.5 million, erasing a decade of job gains.
“Based on the current situation, we now believe that some of our colleagues may not return to work this year," MGM Resorts acting Chief Executive Bill Hornbuckle said in a Tuesday memo to employees. The casino company had hoped a significant part of operations would have bounced back by the summer, he said.
Covid-19 hit some of General Electric’s strongest businesses hard, Chief Executive Larry Culp said on a call late last month about results for January through March. Orders in the aviation business, which makes engines for Boeing Co. and Airbus SE, fell 14%. The company on Monday said it was cutting roughly 13,000 jobs in its jet-engine business.
“We’re facing significant headwinds in aviation, and we may be for a while. We wish it were otherwise, but that’s not our reality," Mr. Culp said.
Other aerospace companies are also feeling the impact. Raytheon, which makes everything from jet engines to missile systems, is planning $2 billion in expense cuts.
“We’re furloughing folks both at the corporate office and across the commercial businesses. Also, we furloughed people [at] the factories, and I expect there will be further reductions," Raytheon Chief Executive Greg Hayes said Thursday.
“Employers as a whole have dramatically reduced their recruiting, and it is not clear when this will recover," said Christian Sutherland-Wong, chief executive of job-listings and company-ratings site Glassdoor in a staff memo Thursday. The San Francisco-based company said Glassdoor would lay off 30% of its workforce, or 300 people, including many who sell ads to smaller businesses.
Mohawk Industries Inc., a manufacturer of rugs and other flooring products, also is carrying out layoffs and furloughs as it deals with an abrupt decline in demand, executives said Tuesday. “The coronavirus has dramatically changed our short-term strategies as we adapt to the rapidly evolving conditions," Chief Executive Jeffrey Lorberbaum said.
Other executives are cutting jobs as they speed up restructuring initiatives started before the pandemic. Nordstrom Inc. said Tuesday it would permanently close 16 stores in part to help it better focus on meeting customer expectations for digital shopping. Covid-19 is heightening the importance of such efforts, Chief Executive Erik Nordstrom said.
Mattel Inc. said in a filing that the Covid-19 crisis accelerated existing cost-cutting plans and disclosed it would let 4% of corporate staff go.
On Thursday, Cox Automotive said it would furlough roughly 10,000 workers in the U.S., most of whom work at Manheim, the company’s wholesale-vehicle auction business. The Manheim unit had been transitioning toward digital operations, but Covid-19 pushed the company to speed the shift from in-person to online auctions, given the latter offers a safer experience for clients, according to Cox.
Uber finance chief Nelson Chai told investors Thursday that the ride-hailing firm, which is laying off more than 3,700 workers, doesn’t think it will bring as many people back over time.
“I don’t think you’ll see us adding back at that same level," Mr. Chai said. “As you know, the company’s been very much focused on efficiency."
This story has been published from a wire agency feed without modifications to the text.