“One-third of US CFOs now expect it will take more than six months to get [back to ‘business as usual’], a dramatic increase from the 2% that predicted a longer recovery when we first launched our survey”, PwC wrote last month, in the latest installment of a series inaugurated when emergency measures to contain the spread of COVID-19 were first put in place in the US.
Each passing day seems to bring fresh evidence to support the contention that the world’s largest economy is headed back into what will ultimately amount to an across-the-board shuttering of storefronts and blinds. Of course, that doesn’t mean the White House is going to recommend the closure of all non-essential businesses or suggest a sweeping new stay-at-home order. It also doesn’t mean that every state will simultaneously shut everything down again.
Rather, the cumulative effect of new restrictions and containment measures could end up approximating a “soft” version of a nationwide lockdown — a kind of piecemeal path to a summer shutdown. In fact, states representing almost 80% of the US population are rolling back or pausing their respective re-opening plans.
It’s now up to Congress to come together on a new virus relief bill that addresses this rapidly evolving situation.
One major risk is that lawmakers won’t include enough protections for the unemployed because they fail to appreciate the possible implications for the labor market of the pivot back towards containment.
The latest jobless claims data (on Thursday) will be watched even more closely than usual given that the previous week’s worrisome figures showed the smallest decline since March.
Some fret that the July jobs report will be a disappointment — that the numbers from May and June were a false dawn.
There is considerable risk associated with brinksmanship inside the Beltway at a time when the labor market is in a renewed state of flux due to the rollback of re-openings. Failure to provide adequate protection for the unemployed in the new legislation will leave the economy at the mercy of the virus with Congress in summer recess.
And, remember, unlike retail sales, the labor market is not back to pre-pandemic levels, contrary to what you might be inclined to believe if you were shown a month-on-month change chart.
In a kind of self-referential testament to the precariousness of the situation, LinkedIn said this week it plans to layoff nearly 1,000 people.
“LinkedIn is not immune to the effects of the global pandemic. Our Talent Solutions business continues to be impacted as fewer companies, including ours, need to hire at the same volume they did previously”, CEO Ryan Roslansky said, in a letter to employees, adding that,
To continue adapting and accelerating the company like we have been, we need to ensure we are focusing our efforts and resources against our most strategic priorities to set up the company for success today–and well into the future. When we took a hard look at the business, we decided we needed to make some hard calls.
After weeks of discussion and deliberation, the executive team and I have made the extremely difficult decision to reduce approximately 960 roles, or about 6 percent of our employee base, across our Global Sales and Talent Acquisition organizations. I’m sharing this news today so that everyone has the complete picture of these changes and why we are making them, and I want you to know these are the only layoffs we are planning.Â
[…]
[A]s mentioned above, COVID-19 is having a sustained impact on the demand for hiring, both in our LTS business and in our company. In GSO and GTO, there are roles that are no longer needed as we adjust to the reduced demand in our internal hiring and for our talent products globally.Â
So, here is a company that facilitates hiring for other companies, cutting jobs because the demand for employees is structurally lower due to the pandemic.
You can see why I referred to this as “self-referential”. The contraction in the global labor market is now forcing the elimination of jobs at a business which helps grease the wheels of that same global labor market.
Mercifully, LinkedIn is extending a number of benefits for the newly unemployed. Among other things, Roslansky said the company will provide a minimum of 10 weeks severance, will pay for a year of health insurance for US employees, and will allow everyone to “keep LinkedIn cell phones, laptops, and recently purchased equipment to help work from home, so they have the practical tools they need to help with career transitions”.
I suppose the silver lining is that LinkedIn employees presumably have an advantage in the race to secure new jobs. After all, they know how to navigate one of the world’s foremost platforms for connecting job seekers with prospective employers.
Oh, and if you’re wondering whether this might be a good time to seek alternative employment with Silvio Dante down at the ‘Bing, the answer is… it’s complicated. I’ll leave you with Reuters:
Backlights off, music quiet and poles bare, strip clubs across the United States closed earlier this year in the face of COVID-19 social-distancing measures that precluded the up-close nature of the exotic dancing industry. Like many businesses, these cabarets, lounges and gentlemen’s clubs hoped a $660 billion Small Business Administration (SBA) loan program would help them weather the lockdown.
But nearly four months since the launch of the loan initiative known as the Paycheck Protection Program (PPP), it is still unclear whether the SBA can make it rain for them. The Trump administration has barred companies that “present live performances of a prurient sexual nature” from participating. Clubs sued, and two federal judges rebuked the SBA for excluding the establishments from receiving the forgivable loans meant to protect jobs amid the health crisis.
Will the SBA allow clubs that have not won a court order to participate? And for those that received loans, either through court order or from banks that apparently took a broad interpretation of the law, will the government forgive the loans, as it does for other borrowers?
“…it is still unclear whether the SBA can make it rain for them.” Brilliant.