How industries and firms are responding to the uncertainty of our times…
The goal of this post is to look at the actions industries and firms are taking to mitigate the risk posed by COVID-19 and hopefully take those learnings and scale these down to smaller businesses and our personal lives. We will NOT discuss the virus, social distancing, number of deaths. The focus will remain on the economic impacts of this once-in-(hopefully)-a-century situation.
The views presented in this post are my own and my past and present employers have nothing to do with the content that follows.
Technology industry
Amazon seeks to employ 100,000 additional staff to fulfill the increased online shopping demand and hopes to employ the workforce that may have lost their day jobs in other industries. (In addition to debunking claims of lack of sanitization at the fulfillment center,) Amazon is increasing health safety measures in the supply chain, giving cash grants equivalent to 2 weeks pay to employees not eligible for PTO, and has committed $25 million to help delivery drivers, seasonal workers to cope up with COVID-19.
Google, with its partners, has taken steps to combat misinformation by setting up a dedicated page for COVID-19. Additionally, it is making its technology and platforms (ex. Meet) available for virtual learning resources. Google has also pledged $50 million to the global COVID-19 response, focusing on health and science, access to educational resources and small business support. Through Project Baseline, California residents can fill out a questionnaire to find out if they are eligible for early testing of COVID-19 in remote mobile sites.
Apple has committed $15 million to the cause and has shut down all Apple stores through March 27th with an exception of Greater China region where the curve of new cases has relatively flattened and the stores were opened on March 13th.
Airlines
Airlines are seeing negative net bookings (i.e. more cancellation refunds are issued than bookings revenue generated). Delta Air Lines has canceled 65% of flights in May and 50% for the second quarter. The CEO of Delta plans to forgo 6 months of his salary. American Airlines plans to cancel 30% of flights in May and 23% in the second quarter. United Airlines has it’s schedule down to 50%. Southwest Airlines is shrinking capacity by 20% from mid-April through early June. Its planes were flying 67% full in mid-March and are trending down to 50%, according to the CAPA Centre for Aviation, an airline industry research group. The report also claims that most airlines would be bankrupt by the end of May if the situation worsens and an analyst on the subject claims that the industry should adopt a Draconian halt of business operations if it expects to survive these uncertain times.
Entertainment and sports sector
In Hollywood, about 120,000 film industry workers have already lost their jobs as a result of the coronavirus shutdown, according to the US entertainment industry union IATSE (International Alliance of Theatrical Stage Employees).
Netflix has set up a $100 million fund to support the cast and crew that have suddenly found themselves out of work. Additionally, The European Commission is putting pressure on Netflix and other streaming platforms to switch to standard definition (as opposed to HD or High Definition) during periods of peak demand as the coronavirus crisis puts an unprecedented load on Internet infrastructure. However, some streaming services are offering free content to spread awareness and encourage social distancing.
Other than theatres and movies, Disney resorts shut down on a rare third occasion, the most recent one is 09/11.
Most sporting events, including the NBA, major soccer league, French open, NASCAR cancel events, even the 2020 Olympics may be canceled.
Finance
According to the Wall Street Journal, the trump bump is about to be erased with the global equity losing trillions of dollars. Coupled with the price wars in the oil sector, the US futures suggest a bearish trend. Interest rates in the US have been cut to be very close to 0% to help cope with the adverse impacts COVID-19 is likely to have on the economy.
Healthcare sector
The CDC’s interim guidance lays out the goals for an overwhelmed healthcare industry. Key Goals for the U.S. healthcare system in response to the COVID-19 outbreak are to:
- Reduce morbidity and mortality
- Minimize disease transmission
- Protect healthcare personnel
- Preserve the healthcare system functioning
Other SMB’s
Restaurants, services, hourly workers, small businesses are trying to stay afloat by offering limited services leveraging rotating skeleton crew to ensure that everyone suffers a little rather than a small number suffering a lot.
While otherwise, competitors have united to fight this war against coronavirus together, for the Millennials, it just seems a bad time to be an atheist.
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