The first wave of hiring freezes and layoffs are being reported in a variety of industries nationwide, including hotels, restaurants, and airlines, as the spread of coronavirus appears to have put a halt to America’s growing economy.
Since federal, state, and local authorities began confirming cases in the last month, hundreds of companies have been shedding staff as large-scale events have been canceled and the public has heeded warnings to avoid gatherings.
As of Thursday afternoon, there have been more than 1,360 reported cases of coronavirus in the United States. At least 39 people have died.
The Port of Los Angeles, the busiest port in the country, has become a ‘ghost down.’
The steep drop in the amount of cargo brought into the port has prompted Shippers Transport Express to lay off 145 drivers who transport containers to corporate warehouses, according to The Washington Post.
In a notice to laid off workers, the company told drivers that there is a ‘near shutdown’ of operations ‘for the foreseeable future.’
Cranes stand idle at the Port of Los Angeles, which is the nation’s busiest container port, on Friday. Some 145 drivers who transport containers to corporate warehouses have been laid off as a result of the economic slowdown caused by the coronavirus pandemic
‘I’ve been working the ports for 13 years, and I’ve never seen anything like this,’ said Randy Williams, a trucker for Shippers Transport Express.
‘I’m glad I didn’t buy a house yet.’
On a typical night, the port handles more than 1,000 containers at his department.
Now, that activity has dropped to just 200, Williams said.
Seattle, the city that has been among the hardest hit by the coronavirus outbreak, has seen tourism come to a complete standstill.
The Seattle area is dealing with the worst COVID-19 outbreak in the country, with at least 24 deaths, and businesses are bracing for the cascading effect of losing customers for the foreseeable future.
Hotel bookings dropped as big conventions, including the Emerald City Comic Con, were canceled or postponed.
‘You can see it and feel it on the streets. You can see it in restaurants and hotel lobbies,’ said Jon Scholes, president and CEO of the Downtown Seattle Association.
This has led hotels in downtown to lay off staff, though the extent of the layoffs won’t be known until data reports at the end of the month.
The Amazon headquarters sits virtually empty in downtown Seattle, Washington, on Tuesday. Hotels in downtown are laying off workers as occupancy rates dip by as much as 60 per cent, according to officials
As of Thursday afternoon, there have been more than 1,360 reported cases of coronavirus in the United States. At least 39 people have died
The number of coronavirus cases has increased geometrically since last month
The Washington Hospitality Association is reporting that some hotels in downtown are seeing a decline of between 40 and 60 per cent in occupancy, according to Puget Sound Business Journal.
The hospitality industry is a key engine of the local economy.
There are 296,600 people – 10.3 per cent of the total private workforce – across Washington State working in hospitality, according to WHA.
South by Southwest, the popular annual festival that takes place in Austin, Texas, laid off at least 50 employees – or a third of its year-round staff, according to Variety.
The festival was forced to cancel events this year after Austin banned mass gatherings due to fears of the coronavirus outbreak.
SXSW co-founder and CEO Roland Swenson told The Wall Street Journal last weeks that the company is likely to lose ‘tens of millions of dollars’ as a result of the cancellations.
The festival released a statement saying: ‘Due to the City of Austin’s unprecedented and unexpected cancellation of the SXSW 2020 events in March, SXSW has been rigorously reviewing our operations, and we are in the unimaginable position of reducing our workforce.
‘Today we said goodbye to approximately one-third of our full-time staff.
‘Those of us in the business of live events know the level of trust required to execute an event of SXSW’s scale, and we are deeply sad to let people go this soon.
‘We are planning for the future and this was a necessary, but heartbreaking, step.’
South by Southwest, the popular Austin, Texas-based festival, laid off a third of its year-long staff – 50 employees – after the event was canceled this year. The above image shows Antones Nightclub in Austin last week after the cancellation was announced
Other industries are also feeling the pinch.
Boeing is freezing new hiring and overtime except in certain critical areas in efforts to preserve cash due to the coronavirus outbreaks and the 737 MAX grounding, people familiar the matter said on Wednesday.
Layoffs or furloughs were also a ‘real possibility’ but were seen as a separate, later action, one of the people said.
A second industry source said job cuts were likely as the aviation industry is squeezed by plummeting travel demand and a safety ban on the 737 MAX after two fatal crashes hit the one-year mark.
A Boeing official said there were no plans at this time for job cuts but the company was closely monitoring business conditions.
Delta Airlines says it, too, will freeze hiring while offering employees a voluntary leave option in order to streamline costs.
The airline says it is reducing system capacity by 15 per cent domestically and up to 25 percent internationally.
‘In the weeks since COVID-19 emerged, Delta people have risen to the challenge, taking every possible action to take care of and protect our customers during a stressful time,’ said Delta CEO Ed Bastian.
Seattle-based Boeing announced that it is instituting a hiring freeze and that layoffs were possible in the near future. Boeing-made Southwest Airlines aircraft are seen above in Victorville, California, in March of last year
‘As the virus has spread, we have seen a decline in demand across all entities, and we are taking decisive action to also protect Delta’s financial position.
‘As a result, we have made the difficult, but necessary decision to immediately reduce capacity and are implementing cost reductions and cash flow initiatives across the organization.’
Royal Caribbean Cruises announced on Wednesday that it was laying off contracted workers used for ‘special projects.’
The layoffs are ‘part of efforts to manage the company prudently and reduce operating expenses,’ a spokesperson told the Miami Herald.
Royal Caribbean declined to say how many contracted workers it was laying off.
Royal Caribbean said on Tuesday it increased its credit capacity by $550 million to boost liquidity.
The company’s stock plunged this month, amid concerns that the coronavirus outbreak would curtail travel.
‘These are extraordinary times and we are taking these steps to manage the company prudently and conservatively,’ Royal Caribbean Cruises Chairman and Chief Executive Richard Fain said in a statement.
The large cruise providers – Royal Caribbean, Carnival Corp., and Norwegian Cruise Line Holdings – say they have each lost more than 50 per cent of their market share in 2020 as a result of the economic downturn.
The three major cruise lines, which are based in Miami, have also seen their stock prices tumble.
Princess Cruises on Thursday suspended its ocean voyages for two months while Viking Cruises has also halted trips until May because of the coronavirus outbreak.
US-based firm Princess said its 18 cruise ships would stay in port until May 11 after two of its ships suffered virus outbreaks, including the Diamond Princess in Japan.
Ships which are currently at sea will sail to their final destination if they are due to finish before March 17, or dock elsewhere if the cruise was due to last longer.
Royal Caribbean Cruises announced on Wednesday that it was laying off contracted workers used for ‘special projects.’ The company’s Mariner of the Seas is seen above departing Port Canaveral, Florida, on Monday
Meanwhile, Viking Cruises has suspended all its ocean and river trips until May after three Britons tested positive on one of its vessels in Cambodia this week.
The company said there were ‘significant risks’ of quarantines or medical detentions, after a spate of virus scares at sea in recent weeks.
In Florida, toy manufacturer Basic Fun, which sells to retailers such as Walmart, Target and Amazon, has plans to cut its operating budget by as much as 15 per cent, which will result in layoffs for at least 10 per cent of its workforce, Chief Executive Jay Foreman told Reuters.
The company manufactures all of the toys at factories owned by its vendors in China, where the outbreak originated earlier this winter.
But its supplies since the outbreak have been cut off.
The toymaker had brought in excess merchandise in December and January to avoid the proposed increases in US tariffs on Chinese goods, but the inventory is set to run out in April.
Foreman says he is ‘losing a lot of sleep’ as there is no clarity when the factories in China would be fully up and running and how the outbreak will impact overall consumer demand.
‘If I was losing two hours a night on the tariffs, I am losing three hours a night on coronavirus,’ Foreman said.
‘We have to watch our bottom line this year. This is going to be a challenging year.’
Wisconsin-based Putzmeister America, which makes machines for pumping, distributing and placing concrete, has frozen new hiring and cut travel expenditure.
Like Basic Fun, Putzmeister’s supply chain links back to China and Chief Executive Jonathan Dawley said the company has not been able to get key components.
Delta Airlines says it, too, will freeze hiring while offering employees a voluntary leave option in order to streamline costs. A Delta ticketing agent is seen above at Ronald Reagan Washington National Airport in August 2016
He expects a $5million sales hit from the outbreak.
At Oren Ezra’s small cosmetics factory in Sylmar, California, just outside Los Angeles, the disruptions in China have cut supplies of ingredients used to make sunblock and other skincare products as well as the distinctive packaging produced there.
Ezra’s company, Formology Lab, was about to start filling a big order for a customer who was launching a new line when the crisis hit.
He had to put the brakes on it as he waits for supplies to start flowing again.
The plant operates two production lines, which each require 20 workers – but the laborers work on an as-needed basis. When they’re not working, they’re not paid.
‘For this project, 20 people have already lost a week of work,’ he said.
‘And that’s only one project. We’re not sure what will happen with a few others we’re doing.’