After suffering one of the worst periods of unemployment on record, thousands more workers are expected to lose their jobs in the coming weeks and months, as the global economy enters a deep recession.
After months of lockdown across the world, several companies have come out this week to announce severe job cuts as they adjust to the new landscape for businesses in the months to come.
The aviation industry has been one of the worst hit by the coronavirus, as international travel essentially ceased since March, with companies like Virgin Australia collapsing as a result. This week, airline EasyJet announced it would cut 30% of its workforce in the coming weeks, thought to represent about 4,500 jobs. As a stark warning of how long the impact of coronavirus will be felt, it forecast that air travel would not recover until 2023.
EasyJet’s cuts come at the same time British Airways is also expected to reduce its workforce by 12,000. The UK-arm of Virgin’s aviation business – Virgin Atlantic – is also reducing its workforce by 30% and has announced it will cease all operations at Gatwick.
Aviation manufacturer Rolls-Royce has also been impacted by the drop in orders for new planes, and announced cuts to 9,000 jobs as a result of the industry’s near collapse.
The virus has of course impacted many around the world, with few industries escaping unscathed. Following the deterioration of the oil market thousands of jobs are now at risk with engineering firm Subsea 7. The company, which assists with the offshore gas and oil industry, announced 3,000 jobs would be cut in “cost reduction measures”.
Car makers are also looking to cut costs as people begin working from home, and car showrooms begin their ‘new normal’ in the years to come. Figures released this week laid bare the extreme drop in car production – down a shocking 99.7% on this time last year.
Nissan gave workers in Sunderland a boost by announcing their plant there would remain open. Plans to close a plant in Barcelona however resulted in violence, as angry workers vented their frustration at the decision. Renault also announced cuts of 15,000 across the globe as part of a massive £1.8 billion cost saving effort.
Unemployment has already been in the news, as different countries offered varying levels of protection for workers. While furloughing has been relatively successful for many in the short-term, the reality is that governments can only go on with this for so long. The longer-term economic damage of the coronavirus and the recession it has now caused, means that businesses will see reduced income, and have to let workers go. The risk of course is that this will also reduce consumer spending and make matters worse.
Stock markets have rallied somewhat in recent weeks, as markets hope that the easing of lockdowns will start to repair some of the damage done, but as figures like those reported this week show, these could be false hopes to build the rally upon.
Silver has held its recovery since slumping in March, but with industry scaling back this could continue to keep the alternative metal at its perceived low price until production ramps back up fully in the coming months. Gold has held strong above $1,700 this week however despite the slight stock market rally, as investors continue to turn to gold to try and protect their wealth in what looks to a volatile time for the global economy.
