coronavirus and the economy
May 28, 2020

American Airlines told employees on Wednesday that it plans on cutting its management and administrative staff by 30 percent, as the company struggles with low demand due to the coronavirus pandemic.

American has about 17,000 management and support workers, and the move will eliminate more than 5,000 jobs. Because of the pandemic, the number of passengers on planes plummeted in March and April, and airlines believe it could take years before travel is back to where it was pre-pandemic.

In a letter to employees, Elise Eberwein, American's executive vice president of people and global engagement, wrote that the company "must plan for operating a smaller airline for the foreseeable future." Volunteers will be able to take buyouts through June 10, but if not enough people step forward, forced cuts will be made.

American will keep the employees on its payroll through the end of September, as this was a requirement for airlines to receive billions in government aid. The company has received $5.8 billion to cover labor costs and has applied for an additional $4.75 billion government loan. Catherine Garcia

May 27, 2020

Discount retailer Tuesday Morning has filed for Chapter 11 bankruptcy protection, and plans on closing 230 of its 687 stores by the end of summer.

CEO Steve Becker said in a statement on Wednesday that before the coronavirus pandemic, the company was gaining momentum, but "the prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business. The complete halt of store operations for two months put the company in a financial position that can be effectively addressed only through a reorganization in Chapter 11."

As part of its restructuring plans, Tuesday Morning is looking to close stores that are underperforming or in a saturated market. The company temporarily shuttered its stores on March 26 because of the pandemic, and said more than 80 percent of all locations have since reopened. During its last fiscal year, Tuesday Morning generated about $1 billion in sales, CBS News reports. In recent weeks, J.C. Penney, J.Crew, and Neiman Marcus have also filed for Chapter 11. Catherine Garcia

May 20, 2020

Pier 1 Imports is the latest retail victim of the coronavirus pandemic, announcing on Tuesday it is seeking bankruptcy court approval to start an "orderly wind-down" of its operations.

The retailer was struggling before the pandemic; the company filed for Chapter 11 bankruptcy protection in February, one month after saying it planned on closing up to 450 locations. Pier 1 has about 541 U.S. stores, and will hold liquidation sales once they can reopen.

Pier 1 CEO and CFO Robert Riesbeck said in a statement the company spent "months working to identify a buyer who would continue to operate our business going forward. Unfortunately, the challenging retail environment has been significantly compounded by the profound impact of COVID-19, hindering our ability to secure such a buyer and requiring us to wind down."

This was "not the outcome we expected or hoped to achieve," he said, and the company remains "grateful to our dedicated and hardworking associates, millions of customers, and committed vendors who have collectively supported Pier 1 for decades." Catherine Garcia

May 19, 2020

Whether they appear to be beating COVID-19 or not, states around the U.S. are starting to cautiously reopen. "But analysts say that businesses and their customers, through their actions, will decide when the economy opens up again," not governors, NPR's Jim Zarroli reports, and so far, consumers are mostly staying locked-down. "News reports have shown pictures of crowded bars in Wisconsin and busy beaches in Florida, but businesses that have reopened say customers have been slow to return."

"I think some mall owners and retailers have been taken by surprise as to how slow this build is," GlobalData analyst Neil Saunders tells NPR News. "Consumers are very concerned about coming out. And some are just not confident to go out to locations and shop like they used to." Listen to Zarroli's report below. Peter Weber

May 7, 2020

Researchers at the University of Maryland who analyzed smartphone location data found that in the week after Georgia let businesses like dine-in restaurants and hair salons reopen on April 24, an additional 62,440 visitors traveled there daily, with most coming from nearby states where those businesses were still closed.

The researchers said this provides evidence reopening some state economies earlier than others could possibly worsen and extend the spread of coronavirus. "It's exactly the kind of effect we've been worried about," Prof. Meagan Fitzpatrick of the University of Maryland School of Medicine told The Washington Post. "This is not an unpredictable outcome with businesses opening in one location and people going to seek services there."

Lei Zhang, the study's lead researcher, said they used anonymized location data from smartphone apps, which showed that in the week after April 24, a total of 546,159 people traveled to Georgia from other states. That included 62,440 more daily trips than in the week before the reopenings, Zhang said. Researchers also found 92 percent of those additional trips were people coming from Alabama, South Carolina, Tennessee, and Florida. At the time, Georgia was the only state in the region that allowed entertainment venues to open, in addition to hair salons and barber shops, gyms, and dine-in restaurants.

Fitzpatrick told the Post it will take at least two weeks to see if the higher rate of interstate travel results in more coronavirus hospitalizations and deaths. Read more at The Washington Post. Catherine Garcia

May 4, 2020

California Gov. Gavin Newsom (D) on Monday said that as early as Friday, some retail businesses — including bookstores, sporting goods retailers, and florists — will be allowed to reopen and offer curbside pickup.

"We are entering into the next phase this week," Newsom said. "This is a very positive sign and it's happened only for one reason: The data says it can happen." Counties that want to be able to open more businesses will have to take certain steps, including conducting more coronavirus testing and ensuring there are adequate hospital beds.

Newsom said detailed guidelines will be released later this week, and in order for more restrictions to relax, the state has to do more testing and trace infections, so people exposed to COVID-19 can be quarantined. The state is working with two University of California campuses to recruit and train new tracers, with Newsom aiming to hire 20,000 people within the next few weeks.

While some isolated protests against Newsom's stay-at-home order have been held, recent polls show that 70 percent of Californians approve of how Newsom is handling the crisis and 70 percent are more concerned about reopening the state too early rather than too late, the Los Angeles Times reports. Catherine Garcia

May 1, 2020

Several states are lifting their COVID-19 mitigation orders Friday, allowing many businesses to reopen, usually with some health precautions in place. In Georgia, for example, Gov. Brian Kemp (R) is lifting shelter-in-place orders for most of the state, even with 37 new coronavirus deaths and 227 new cases reported in the past 24 hours. In Texas, where Gov. Greg Abbott (R) is allowing restaurants, movie theaters, and retail stores to reopen at 25 percent capacity, a record 50 deaths and 1,033 new cases of COVID-19 were registered Thursday.

The businesses that choose to reopen need workers, and the workers being called back to their jobs face some tough choices.

Some states, most with Republican governors, have underscored that laid-off or furloughed employees who refuse to return to work will be aggressively barred from collecting unemployment benefits. "That's a voluntary quit," said Iowa Gov. Kim Reynolds (R). "Therefore, they would not be eligible for the unemployment money." In Oklahoma, where the minimum wage is $7.25, state economic officials encouraged employers to report unwilling workers and discussed scrapping the federal $600-a-week unemployment add-on to encourage people to return to work.

"These states are offering people the choice to endanger your life or starve," says the AFL-CIO's Damon Silvers.

Texas announced Thursday it will relax its unemployment rules so people at high risk of dying from COVID-19, workers who live with high-risk people, or those without child care can still collect unemployment benefits. But everyone else faces some hard choices, especially in the food service industry, as ProPublica's Jessica Huseman explains.

Texas businesses are making it easier for some workers. None of the major movie chains are reopening — they have no new movies to show, Texas Monthly notes — and some smaller and independent restaurants are opting to keep their dining rooms closed rather than reopen with 25 percent of seats. "All restaurants are not created equal as far as ability to generate revenue," Emily Williams Knight, head of the Texas Restaurant Association, tells The Texas Tribune. Peter Weber

April 30, 2020

Boeing announced Wednesday that it lost $1.7 billion in the first quarter of 2020, fueled by the grounding of its troubled 737 MAX airliners and the collapse of commercial aviation due to the COVID-19 pandemic, and it is cutting 10 percent of its workforce, or more than 14,000 jobs. Most of the job cuts will be focused in Boeing's commercial aircraft division, especially factories outside Seattle and Charleston, South Carolina.

"These layoffs are permanent," aviation consultant Mike Boyd told The Washington Post. Even if commercial aviation picks up again in late 2020 or 2021, "Boeing has to shrink in size. The marketplace that they were selling to last year doesn't exist anymore and it won't exist for three years or more." Airlines and leasing companies have been canceling orders for aircraft, and while Boeing hopes to restart production on the 737 MAX this year, it is halving its production of 787 Dreamliner jets. Boeing has not yet said it if will apply for federal coronavirus recovery funds.

Boeing's main rival in commercial aviation, Airbus, also announced steep cuts in production Wednesday and said it will furlough staff in Germany, France, and Britain. Airplane part suppliers are being slammed by the swoon in air travel. General Electric said Wednesday that it is also cutting 10 percent of its 52,000 aviation unit employees and will furlough thousands more. Peter Weber

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