Layoff Storm vs 100,000 Additional Hires... How COVID-19 Divided Corporate Fortunes

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jaehee] The prolonged COVID-19 pandemic has caused mixed fortunes among companies. Industries directly hit, such as aviation and the automotive sector, are facing massive layoffs, while untact (contactless) companies and some retail businesses experiencing a temporary boom are seeing stock price increases and additional hiring.

Global automakers with factories in the U.S., including Toyota Motor Corporation, are implementing temporary layoffs due to the impact of COVID-19. Toyota has decided to extend the suspension of operations at its North American plants, including those in Kentucky, USA, Canada, and Mexico, resulting in temporary layoffs of about 5,000 employees. The reopening of factories is difficult due to COVID-19, and sales have plummeted due to decreased demand. Toyota's sales in the U.S. market last month dropped sharply by 37% to 135,730 units, marking the worst performance since the Great East Japan Earthquake in 2011. Honda and Nissan are facing similar situations. Nissan alone has temporarily laid off about 20,000 employees worldwide, including 10,000 in the U.S., 6,000 in the UK, and 3,000 in Spain. Honda is also implementing paid leave for 10,000 workers, half of the workforce at five U.S. assembly plants, until the end of next month.

The aviation industry, which has seen air routes blocked due to COVID-19, is in the same situation. European aircraft manufacturer Airbus plans to cut a total of 2,362 jobs by the end of next year. Specifically, 829 jobs in Germany, 357 in the UK, 630 in Spain, 404 in France, and 142 in other regions will be cut.

[Image source=AP Yonhap News]

On the other hand, some companies are experiencing an unexpected boom due to COVID-19. Walmart, a major U.S. retailer, is a representative example. Walmart's offline store sales increased by about 20% over the past month. Riding this wave, Walmart has hired over 100,000 new workers in the past three weeks and announced plans to hire a total of 150,000 by the end of May. Dan Bartlett, Walmart's Vice President, said, "Most of the jobs are temporary, but about 10-15% will be permanent positions." Another major U.S. retailer, Target, also saw sales increase by more than 20% year-on-year across offline and online channels in March.

The boom in untact companies due to COVID-19 is also notable. GSX, a Chinese online education company listed on Nasdaq, saw its stock price grow by 92% since the beginning of the year. Hong Kong-based video education startup Snapask saw a significant increase in new student registrations in January and February, earning $35 million (approximately 42.46 billion KRW) in February alone. Microsoft, which provides online-based software services, saw its stock price jump 7% in a single day on the 30th of last month. Microsoft offers applications for video calls and messaging, gaining 12 million new users daily for a week since mid-March.

With the spread of social distancing, demand for online videos has exploded as people avoid movie theaters. Disney announced on the 8th (local time) that its subscriber count has reached 50 million. Previously, Disney reported 26.5 million subscribers during its first-quarter earnings announcement on February 4. This means it secured more than double the number of new subscribers in just two months.

This content was produced with the assistance of AI translation services.