- May 31, 2020
- Posted by: Trading
- Category: News
Many industries find themselves faced with additional closures rather than re-employment.
Across the United States economies are slowly starting to reopen. Restaurants are being allowed to open in Colorado and Illinois this week, and Walt Disney World announced plans to re-open in mid-July with strict adherence to social distancing policies and reduced guest capacity. Nevertheless, many industries find themselves faced with additional closures rather than re-employment.
One such industry is the airline industry. Air travel is not expected to return to its recent peak anytime soon, and painful adjustments were announced stateside yesterday. Boeing fired 6,770 employees on Wednesday as the latest step in its plan to cut 16,000 total jobs, or 10 percent of the company’s total workforce, due to coronavirus closures. Most of the workers laid off on Wednesday will remain on the company’s payroll through July. Yesterday’s layoffs brought the company’s job cuts to over 12,000 thus far. Additional rounds of layoffs will be forthcoming in the months ahead. Boeing’s stock price jumped over 1 percent after the layoffs were announced. Boeing’s rival, Airbus, furloughed some 6,000 workers in April, but the company hasn’t outlined a longer-term layoff strategy.
American Airlines also announced cutbacks yesterday with news that it will cut 30 percent of its workforce, which amounts to around 5,000 jobs. 39,000 of the company’s 130,000-person workforce took voluntary leave or early retirement since the start of the coronavirus pandemic. The U.S. government offered an aid package of $25 billion to airlines who agreed not to cut the pay of their employees or lay off workers through September 2020. Analysts expect massive layoffs once the terms of the bailout are met.
More than 2 million Americans filed unemployment for the past 10 consecutive weeks, Reuters reported early Thursday. Though the number of unemployment claims hasn’t dipped below 2 million per week, the number of new people filing new unemployment claims has consistently declined since hitting a peak of 6.867 million requests in March.
The Labor Department’s weekly jobless claims report which will be released later today is expected to show that the number of people receiving unemployment benefits hit a new record high in mid-May. Analysts expect a second wave of employment cutbacks, both in the private sector and in the public sector as businesses adjust to the “new normal” and see that business as usual will mean reduced levels of business, which means less staffing needs, in the near future.