The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments on Monday related to the global economy, the work place and the spread of the virus.
AIR CARE: Britain’s health service is asking airline cabin crew who have been laid off to go to work in temporary new hospitals being built to treat COVID-19 patients. The National Health Service says easyJet and Virgin Atlantic are writing to thousands of staff – especially those with first aid training – asking them to work at hospitals being built inside convention centers in London, Birmingham and Manchester. Those who sign up will perform support roles under the supervision of doctors and nurses.
European budget airline easyJet is grounding all of its 344 aircraft amid a collapse in demand. It said there was “no certainty of the date for restarting commercial flights.” The carrier had already canceled most of its flights and reached an agreement with unions on furlough arrangements for its cabin crew.
JOBS VANISH: Rent the Runway confirmed that it laid off its entire retail staff and is not sure whether stores will reopen. The layoffs were announced via video conference on Friday, the company said. Workers will be getting severance and two months of health insurance. Rent The Runway, founded in 2008, had announced on March 16 that it would temporarily shut down all five retail locations in such cities as Manhattan and Chicago. It’s unknown how many employees will be affected. The company’s online subscription service continues. The job cuts were first reported by online news website Verge.
PAY CUT: Gannett, the country’s largest newspaper publisher, is cutting pay and hours of newsroom employees by 25% in April, May and June because of advertising declines.
The coronavirus pandemic has shut down businesses that typically advertise in newspapers, like restaurants, hotels and art institutions. The company said that many businesses have paused their scheduled ad campaigns. There has been an increase in people going to Gannett’s websites and in digital subscriptions, but it’s not enough to make up for the ad crunch at Gannett, where ad revenues were already in steep decline before the pandemic.
“We expect our revenue to decline considerably during this period,” said Gannett Media CEO Paul Bascobert in a memo to employees.
It is requiring unpaid furloughs for newsroom employees for five business days each month. Gannett is not furloughing employees who earn less than $38,000 a year. Bascobert said the executive team’s pay is dropping 25% and that he is not taking a salary until the furloughs and pay cuts reverse.
Gannett and GateHouse merged last year, becoming the country’s largest newspaper company. It owns USA Today and hundreds of other papers including the Arizona Republic, Indianapolis Star and Austin American-Statesman. The company had already been laying off employees to cut costs after the merger, and those cuts will continue.
RESTAURANTS: U.S. restaurant sales dropped 36% in the week ending March 22 as states and cities banned dine-in service, according to consulting firm The NPD Group. NPD said about 94% of restaurants were operating under some restrictions that week.
Full-service restaurants like Olive Garden and Applebee’s, which rely more heavily on dine-in traffic, saw the steepest decline. Sales fell 71% compared to the same period last year. Fast food sales fell 34%. NPD said fast food chains like McDonald’s were better equipped to handle increased demand for drive-thru, takeout and delivery service.
Italian restaurant operator Carluccio’s has gone into administration in the U.K. as the government’s decision to close down all restaurants in the fight against the coronavirus pandemic exacerbated its financial difficulties.
The collapse of the chain, which began life in central London in 1991 and has expanded to 71 restaurants across the U.K., puts around 2,000 jobs at risk.
Geoff Rowley, joint administrator and partner at FRP, which has taken over Carluccio’s, said “we are urgently focused on the options available to preserve the future of the business and protect its employees.” He welcomed the recently-announced coronavirus job retention scheme, which could see the government pay 80% of workers still on the payroll.
There are worries other long-standing chains could face a similar fate. Burger chain Byron has appointed advisers to assess its future.
HEALTH: Johnson & Johnson says in partnership with the U.S. Department of Health and Human Services that it has $1 billion committed to the research, development, and testing of a COVID-19 vaccine. The New Jersey-based pharmaceutical giant expects to begin human clinical studies of its “lead vaccine candidate” no later than September 2020. The company said the first batches of a COVID-19 vaccine could be available for emergency use in early 2021.
The announcement comes three days after Abbott Laboratories said that the Food and Drug Administration had approved for emergency use its molecular point-of-care test for the detection of novel coronavirus. Abbott says its small, portable ID NOW platform could produce positive test results in as little as five minutes and negative results in 13 minutes. The tests are expected to be available next week and the company says it will ramp up manufacturing to deliver 50,000 per day.
MARKETS: U.S. stocks are rising a bit in Monday trading, but markets were tentative around the world amid uncertainty about whether global authorities can do enough to nurse the economy through the coronavirus outbreak. Some of Monday’s sharpest action was in the oil market, where benchmark U.S. crude fell more than 5% and dropped below $20 per barrel for the first time since early 2002.
EXTRA: Facebook is investing an additional $100 million in local journalism to support reporting on the pandemic. Emergency grant funding of $25 million will go to local news through the Facebook Journalism Project and another $75 million will be devoted to media marketing. Facebook, which has a rocky relationship with the media industry, has already committed $300 million to journalism organizations.