Layoffs spike in U.S., Europe as virus shutters businesses
Many states report large increases in applications for unemployment benefits
Just a couple of weeks ago, Erika Vega hoped her temp job at a cafeteria would soon become permanent. But instead, the viral outbreak shut down the building where she worked and left her wondering where her next paycheck will come from.
Like millions of Americans and people around the world, the viral outbreak has left Vega in financial limbo, without income as her bills pile up.
The U.S. and global economies have come to a shuddering stop, unleashing a wave of layoffs that is much larger and moving much faster than job losses in previous downturns. They are swamping state unemployment benefits systems and leaving many Americans still working anxious about whether they will be next.
Vega, 45, worked as a food preparer and dishwasher at a lower Manhattan office tower until last
Tens of thousands of laid-off workers have already flooded state unemployment websites across the country.
In the week ending March 14, the number of people seeking unemployment aid soared by 70,000 to 281,000, the Labor Department said Thursday.
That figure is still low historically, but it may soon surpass the record high of 650,000 in January 2009.
Many states are already reporting big increases in benefit applications this week, which weren’t included in Thursday’s figures.
In Ohio, more than 48,000 people applied for jobless benefits just this Monday and Tuesday. That’s up from 1,825 in the same two days the prior week.
And in neighboring Pennsylvania, about 70,000 people sought unemployment aid on Tuesday, six times the total for the entire previous week.
Layoffs are rippling through many companies, large and small.
The three major American automakers are temporarily shutting their North American factories, idling 150,000 workers. So are Toyota and Honda.
Smaller companies have shut their doors with little time to prepare.
Restaurants, bars, movie theaters, gyms, and other firms have been ordered to close by states and cities.
The travel industry is at risk of being particularly devastated, with airlines grounding planes and hotels increasingly empty. The U.S. Travel Association predicts that 4.6 million jobs in the industry could be lost.
Jon Bortz, CEO of Pebblebrook Hotel Trust, which owns 54 hotels in major cities including New York, San Francisco and Seattle, said occupancy levels have dropped into the single digits. The company has laid off more than 4,000 of its 8,000 employees, and is likely to let go another 2,000 by the end of March, he said.
“We are looking at closing the doors at more than half of our properties,” he said.
In Europe, job losses are piling up by the hundreds of thousands, though solid figures are not yet available.
Airlines have announced tens of thousands of job cuts already, including 7,300 at Norwegian Air alone, while U.K. airline Flybe collapsed with a loss of 2,000 jobs.
Visitors to the New York Department of Labor were turned away at the door due to closures over coronavirus concerns on Wednesday in New York. Applications for jobless benefits are surging in some states. In the week ending March 14, the number of people seeking unemployment aid rose by 70,000 to 281,000, according to the U.S. Labor Department.