The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Tuesday related to the global economy, the work place and the spread of the virus.
OPEN: There has been a lot of controversy over when it will be safe for businesses to reopen. In some areas hit early by the virus, attempts are underway.
— Austria intends to open all shops early in May, and restaurants in mid-May, said Chancellor Sebastian Kurz. Austria allowed small shops to open a week ago.
The plan for early May includes hair salons and manicurists. The government plans to allow the catering industry to restart May 15, with all staff required to wear masks.
— Copenhagen’s famed downtown Tivoli Gardens, the amusement park that inspired Walt Disney to create his theme parks, will reopen for its summer season on May 11.
JOB CUTS, PAY CUTS The virus has brought with it an unprecedented number of job losses. Companies bereft of revenue continue to slash positions and pay for both executives and employees.
— Hertz is laying off about 10,000 employees in North America with vacations and business travel on hold. The layoffs cross all divisions within the company, and began last week for non-union employees. Hertz anticipates approximately $30 million in costs tied to the layoffs.
— Beaumont Health, Michigan’s largest health care system that has treated thousands of coronavirus victims, is cutting 450 jobs and temporarily laying off 2,475 employees.
Beaumont CEO John Fox said revenue from surgeries and other procedures has “dried up — they’re gone.”
The state has barred Michigan hospitals from performing nonessential procedures during the outbreak.
— Magazine and TV station owner Meredith, because of a “significant decline” in ad revenues, is cutting pay for 60% of its employees, or about 3,000 people, from May until Sept. 4, by 15% to 40%. The highest pay cuts are for its CEO and board. The People magazine publisher is also cutting back significantly on temporary workers and freelancers.
— NPR is cutting its CEO’s pay by 25% and that of other executives by 10% to 15%. The organization says that its priority is to preserve jobs.
RESTAURANT SCENE: Restaurants have been damaged to varying degrees, depending on how reliant they are on people sitting in dining rooms.
— Sales at restaurants open at least a year plunged almost 45% during the most recent quarter, according to the owner of Olive Garden and other national chain restaurants. Darden Restaurants Inc. is selling sell $400 million of stock to raise cash.
— McDonald’s is offering U.S. medical workers and first responders one free meal a day starting Wednesday, through May 5. Workers in uniform or with a badge can get a sandwich, side and a drink. McDonald’s is splitting the cost of the program with its franchisees.
ENERGY DRAIN: The price of crude and other fossil fuels are plunging and job cuts in the energy sector have already begun. The price for a barrel of oil in an expiring contract Monday went negative, which is unprecedented.
— Russian President Vladimir Putin’s spokesman warned markets against an “apocalyptic angle” on crude prices. Dmitry Peskov blamed oil speculators for plunging prices.
Russia has sufficient hard currency reserves to soft-cushion the economic impact, Peskov said Tuesday There are no immediate plan for Putin to set up another call with President Donald Trump to discuss the oil market situation.
— Crude prices plunged another 25% Tuesday for June contracts.
MARKETS: The Dow, S&P; 500 and Nasdaq have all moved into deep negative territory for the year. That selloff continues Tuesday.
— World share prices skidded after the price of U.S. crude oil plunged below zero, with demand collapsing as the pandemic leaves factories, automobiles and airplanes idled.
PEANUT BUTTER & JELLY: A number of companies have filled a dire need during the pandemic, from streaming services, to delivery. Add J.M. Smucker to the list.
— J.M. Smucker is increasing production at all of its plants with demand for jellies, jams and coffee soaring. The company is raising its profit and sales expectations for the year.