- A recent estimate of job cuts due to COVID-19 is at 3,634 as of March 18, according to global outplacement and executive and business coaching firm Challenger, Gray & Christmas Inc., which also estimated that more than 9 million jobs in leisure & hospitality are affected by restaurant and bar closures across 13 states and three cities.
- U.S. Secretary of Treasury Steven Mnuchin told GOP Senators the unemployment rate could hit 20%, compared to just 3.5% in February if no action is taken, the Wall Street Journal reported. The left-leaning Economic Policy Institute estimates 3 million jobs could be lost by summer. Both advocate for financial stimulus packages and other policy measures to curb the losses.
- "Keeping this number down and allowing any job loss to be quickly recouped after the crisis ends should spur policymakers to act," Josh Bivens, director of research at EPI wrote. "Put simply, the federal government needs to finance a much larger part of household consumption in coming months, transfer significant fiscal aid to state governments, and ramp up direct government purchases (particularly on items helpful in fighting the epidemic)."
Businesses will be faced with challenging decisions as the markets dip and revenues sink, while supply chain risks have also increased. Layoffs, hour reductions, compensation changes, and expanded teleworking and leave policies are some of the actions companies have already taken.
The Trump administration has proposed a $1 trillion stimulus package that would include cash payments directly to Americans and assistance to industries that are heavily affected by the outbreak and small businesses. The House of Representatives passed an initial set of measures on March 14, which included paid sick leave, unemployment insurance and free testing for COVID-19. The Senate passed a revised version on Wednesday, and President Donald Trump signed it into law later that night.
The coronavirus is not just impacting service or hourly jobs. IT work is also expected to see a dip in demand, especially given that leisure/hospitality, airlines, and the service industry are all big technology users and buyers as well. Long-term unemployment is also a concern, as it is only now recovering to pre-recession levels.
Additionally, compensation managers are already making adjustments to executive pay plans, and some companies are updating sales incentive plans as well.