2nd Wave Of Coronavirus Layoffs Claiming Workers Who Were Assumed Safe

Second Wave Of Coronavirus Layoffs Claiming Workers Who Thought They Were Safe

Tyler Durden

When the United States went into a virtual lockdown to slow the spread of the coronavirus pandemic, the effects were devastating. Within a three week period, nearly 17 million people have filed for unemployment, while modern day 'bread lines' are getting longer each day across the country.

The initial victims of the lockdown were the most financially vulnerable; restaurant workers, retail employees, and other low-paying jobs in industries which were immediately impacted by a lack of foot traffic.

Now, a second wave of layoffs is hitting those who thought they were safe, according to the Wall Street Journal. White collar workers working from home are being laid off by companies suffering from dismal sales. Law firms are cutting hours and eliminating positions as court systems and legal actions have ground to a near-standstill. And goverment who assumed their jobs would be safe are being furloughed amid city and state budget shortfalls. Even healthcare workers who aren't directly fighting the pandemic are finding themselves without work. 

And according to the Journal, there's more pain in the cards.

The consensus of 57 economists surveyed this month by The Wall Street Journal is that 14.4 million jobs will be lost in the coming months, and the unemployment rate will rise to a record 13% in June, from a 50-year low of 3.5% in February. Already nearly 17 million Americans have sought unemployment benefits in the past three weeks, dwarfing any period of mass layoffs recorded since World War II.

Gregory Daco, chief U.S. economist of Oxford Economics, projects 27.9 million jobs will be lost, and industries beyond those ordered to close will account for 8 to 10 million, a level of job destruction on a par with the 2007-09 recession.

Oxford Economics, a U.K.-based forecasting and consulting firm, projects April’s jobs report, which will capture late-March layoffs, will show cuts to 3.4 million business-services workers, including lawyers, architects, consultants and advertising professionals, as well as 1.5 million nonessential health-care workers and 100,000 information workers, including those working in the media and telecommunications.

“The virus shock does not discriminate across sectors as we initially thought,” Mr. Daco said. -WSJ

Tales of economic chaos

The Journal interviewed a diverse sampling of professionals, who shared what they're seeing within their industries.

"Customers who paid like clockwork for 10-plus years are suddenly late," said Gary Cuozzo - owner of Connecticut-based web host and developer, ISG Software Group, who says he's received just a few hundred dollars in accounts receivable in recent weeks from customers which include manufacturers, retailers and nonprofits.

Law firms, meanwhile, have been cutting staff and slashing pay due to a stark lack of business, as courts are virtually paused and new deals - which typically require lawyers - just aren't happening.

Economic analysts, meanwhile, are basically all over the place when it comes to predicting when the labor market will bounce back, as it all depends - of course - on when this much-promised vaccine will materialize, and when the economy can 'open back up' successfully.