This was the week that the economic toll of the coronavirus pandemic really became clear.
On Thursday, the Labor Department revealed that around 3.3 million Americans filed for unemployment benefits in the week ending March 21, a record high. As Joseph Zeballos-Roig reported, the true unemployment number is likely much higher.
The scale and speed of the surge in unemployment is striking. For many in corporate America, the dramatic turn of events has meant layoffs via virtual meeting. Here’s a sample of some of our headlines from the past week:
- TripActions’ CEO said it’s slashing benefits, closing offices, and its cofounders are cutting their pay in half just days after laying off one-fourth of its workforce.
- Andreessen Horowitz-backed Wonderschool laid off 75% of staff on a Zoom call, telling employees the coronavirus could dry up any more funding for two years.
- Airbnb-backed Zeus Living laid off 30% of staff as the coronavirus upends travel and hospitality startups.
- SoftBank-backed real estate brokerage Compass slashed 15% of staff and is pausing marketing as coronavirus slams the housing market.
- Days after laying off 20% of its workforce, Brookfield-backed Convene furloughed more than half of its remaining employees due to coronavirus closures.
- Flex-space unicorn Knotel just laid off 30% of workers and furloughed another 20% as the coronavirus cripples a once buzzy industry. A leaked memo revealed the CEO’s playbook for burying news about the jobs cuts.
- The CEO of AMC Entertainment told hundreds of staff they would be furloughed in a virtual meeting, as it looks to make sure it can reopen its doors after coronavirus.
- Hobby Lobby is preparing to lay off employees and slash salaries to cut costs in states with mandated store closures due to the coronavirus, according to a leaked letter.
- Leaked email reveals Tesla is furloughing some workers in Norway after a big drop in demand caused by the coronavirus.
- Electric scooter startup Bird laid off 30% of the company in a scramble to preserve a “cash runway” to last until the end of 2021.
- Layoffs, furloughs, and spending cuts: We’re tracking how oil giants from Exxon to Halliburton are responding to the historic price shock.
What you need to know about the stimulus bill
President Trump on Friday signed a $2 trillion stimulus bill that’s meant to offset the economic damage resulting from the pandemic and shutdown. Our team quickly set about making sense of what it means, and potential winners and losers.
Jennifer Ortakales reported that small business owners can get either loans or payroll relief from the $2 trillion coronavirus stimulus bill, but not both. She spoke with two experts to make more sense of the bill and understand how small businesses can determine which program is best for them.
Troy Wolverton reported that while the new stimulus law offers help to all kinds of companies, startups may be barred from tapping into one of its more generous provisions. He explained why Silicon Valley is worried.
Meanwhile, Kimberly Leonard reported that more than $100 billion of the $2 trillion will go toward hospitals, and there are also changes to regulations for over-the-counter drugs and rules about what insurers must cover. She broke down what the $2 trillion coronavirus stimulus bill means for hospitals, doctors, and health insurers.
While we’re talking politics, I want to highlight this profile of Sen. Kelly Loeffler and her husband, Jeff Sprecher, the founder, CEO, and chairman of ICE and chairman of the New York Stock Exchange. The pair hit the news in recent weeks when it was reported that Loeffler sold stocks after being briefed on the impact of the coronavirus. You can read the story here:
There’s a wave of restructuring ahead
Casey Sullivan reported this week:
Restructuring attorneys are scrambling to the aid of businesses large and small as the global spread of the novel coronavirus forces employers to consider what actions they’ll take to sustain a months-long slowdown in revenue.
Dennis Dunne, a Milbank lawyer who represented creditors in the Lehman Brothers bankruptcy, said that the “complete and sudden collapse of revenues and earnings for many companies” was unlike anything he had seen in his career.
“We will be working through the fallout from this economic meltdown for years to come,” he said.
You can read his story in full here: ‘All hands on deck’: Restructuring lawyers say a sudden collapse of revenues is accelerating work with the retail and energy sectors
As Casey previously reported, private equity bet billions on live entertainment in 2019, and now the coronavirus has turned that investment thesis on its head. For example, it was reported this week that Cirque du Soleil, which is backed by private equity firm TPG, was exploring debt restructuring options that included a possible bankruptcy filing.
In related news, Alex Morrell reports that restructuring bankers are suddenly Wall Street’s hot commodity as they’re getting swamped with calls from clients facing a cash crunch.
On a lighter note …
The coronavirus has triggered a wave of human and economic suffering unlike anything that’s been seen in a long, long time. And it’s been hard the past few weeks, especially as a resident New Yorker who’s keeping an eye on friends and family in the UK, to not feel overwhelmed at times.
So I found it heartening that one of the most popular stories on Business Insider over the past two weeks is this one:
It would seem that lots of folks are taking this time to reassess what’s important to them. I think that could be one good thing to come out of this. And, if you are reassessing your career, Shana Lebowitz reported that social distancing could create 15 million jobs in the next decade. She talked to career experts who predicted which industries and workers stand to benefit the most.
Below are headlines on some of the stories you might have missed from the past week. Stay safe, everyone.
- ‘Ground to a halt’: Insiders detail the struggles of trying to launch a hedge fund during a global pandemic
- Morgan Stanley studied decades of recession history to compile a playbook for what to buy during and after a stock bear market — and when to do it
- Major law firms are weighing pay cuts for partners against unseemly staff layoffs as billings plunge
- 7 charts show how the coronavirus could clobber real estate, from retail vacancies of nearly 15% to plunging office rents in Texas cities
- DevOps startups that help developers be more productive will fare well in an economic downturn, VCs say. Here are 17 they think will thrive in 2020.
- The top 17 managers and agents for gaming YouTubers, streamers, and esports competitor
- The coronavirus is upending advertising. Top marketers at Toyota, Burger King, and Hippo reveal how they’re changing their ad strategies to keep up.
- Leaked emails show Amazon is moving full steam ahead with this year’s Prime Day shopping extravaganza, even as it grapples with the coronavirus pandemic
- Meet the 12 telemedicine startups being put to the test as they gear up to confront the coronavirus pandemic
- 8 tips to nailing a video job interview in the age of coronavirus