The first US layoffs from the coronavirus are here

State of the Nation

Source: MSN Money

Hundreds of Americans lost jobs this week as the coronavirus outbreak has taken a toll on the U.S. economy and brought industries to a standstill, according to interviews with two dozen companies and workers.

Strong job growth defined the U.S. economic expansion over the past decade. The early layoffs indicate the coronavirus is triggering a rapid turnaround in an American economy that weeks ago looked strong, with unemployment at a half-century low.

At the Port of Los Angeles, 145 drivers have been laid off and others have been sent home without pay as massive ships from China stopped arriving and work dried up. At travel agencies in Atlanta and Los Angeles, several workers lost their jobs as bookings evaporated. Christie Lites, a stage-lighting company in Orlando, laid off more than 100 of its 500 workers nationwide this past week and likely will lay off 150 more, according to chief executive Huntly Christie. Meanwhile a hotel in Seattle is closing an entire department, a former employee said, and as many as 50 people lost their jobs after the South by Southwest festival in Austin got canceled.

Many job losses have been concentrated in the travel, tourism, events and trucking industries. Economists fear more layoffs in the coming weeks as supply chains come to a halt and people stay home and spend less. 

“We will definitely see an effect on jobs from the coronavirus, and it could be pretty large in leisure and hospitality,” said Julia Pollak, labor economist at ZipRecruiter. “The first thing we’ll see is a reduction in hours. We hear many reports of employers canceling staff everywhere except in health care.”

Monday in Los Angeles, Sam Creighton and about 20 colleagues were fired from the China Visa Service Center. Creighton helped Americans get travel documents to China, but business plummeted as groups and individuals canceled trips to Asia out of virus fear. The company processed around 400 visas a month; in February, that number fell to 22. The visa center did not return a request for comment.

“This job was my paycheck,” said Creighton, 27, who worked at the company for about three years. “I really don’t know what to do next.”

Baiden King lost her job at a bake shop in Omaha on Tuesday because online sales and customer traffic dried up dramatically — especially after the state’s first case of covid-19 was reported nearby. King said her manager told her when she showed up for her shift that morning she had no choice. King made $11 an hour.

“If my job’s laying off people, I can only imagine other employers are as well,” said King, who is preparing to move back in with her parents. “I’m not sure anyone will be hiring.”

These early coronavirus-related jobs cuts appear to have mostly affected younger, entry-level employees and gig workers. Workers receiving pink slips said they have no idea whether these layoffs will be permanent and that it is nearly impossible to look for another job right now, with many companies instituting hiring freezes. Uncertainty is high, and as people lose jobs — or fear losing jobs — they typically scale back spending even more, which has a ripple effect on local economies.

The Port of Los Angeles, the busiest port in the United States, has become a “ghost town,” four workers said. They said the port has never been this quiet, not even during the Great Recession.

Shippers Transport Express sent layoff notices at the end of February to 145 drivers who transport containers from Asia from the port to corporate warehouse hubs. The company told workers there has been a “near shutdown” of its operations at the port “for the foreseeable future.” Many factories closed in China, stunting shipments to the United States.

“I’ve been working the ports for 13 years, and I’ve never seen anything like this,” said Randy L. Williams, a trucker for Shippers Transport Express. “I’m glad I didn’t buy a house yet.”

He said the port typically handles over 1,000 containers a night at his part of the operation, including some Walmart products, but is down to 200. He worked two days in the past two weeks.

Williams has dipped into his savings, and money is tight with a son in college. But he has union benefits and applied for unemployment insurance. He also saved from years of $29-an-hour pay. Not everyone at the port has that situation.

Josue Alvarez drives for another company operating at the port, XPO Logistics, but is classified as independent, meaning he gets no vacation, sick days or health insurance. He pays for his truck and all related expenses. He typically makes $2,000 a week, but since mid-February has made $300 a week, an income he cannot survive on for long.

“There’s a lot of uncertainty right now. My dispatchers say it will get worse before it gets better,” said Alvarez, who is 26 and lives with his parents. His father also is a trucker at the port. They show up early every day hoping for work but in the past two weeks almost always get sent home with no pay.

“The disruption to trade will be felt well beyond the dock workers,” said Stephen Levy, senior economist at the Center for Continuing Study of the California Economy. “Half of China’s goods come to the Port of Los Angeles. That will be felt by warehouse workers, truckers and people in the wholesale trade.”

Some United Parcel Service drivers in Los Angeles have had their hours and pay scaled back. Ron Herrera, international vice president of the Western Region Teamsters, the union representing UPS drivers, cited a decline in shipments because of coronavirus. A UPS spokesman said it was a “routine” staffing adjustment and that those drivers “are allowed to work at either a full- or a part-time” UPS facility.

Major airlines, weathering a massive decline in travelers, have not started layoffs, but nearly all have canceled routes and many have put on a hiring freeze, said Sara Nelson, international president of the Association of Flight Attendants-CWA, AFL-CIO, which represents about 50,000 flight attendants at 20 airlines. It is a major turnaround from the start of the year, when airlines projected they would need to add thousands of flight attendants. Hours are being scaled back, and everyone is on edge about what is next.

“It’s just like a factory,” Nelson said. “When it slows down, and they cut all of the overtime hours, that is a massive pay cut for people right off the top.”

Some of the hardest hit so far are gig workers and independent contractors. They are caught in limbo: Work is drying up, meaning they are effectively laid off, but they do not get to collect unemployment insurance. A payroll tax cut President Trump has proposed would not help them.

“It’s kind of like I’m laid off but I’m not,” said Chad Denick, 35, who was told Monday he no longer needed to report to his job as a catering contractor for a tech company because employees would be working from home for the rest of the month. “But this is what I know: I don’t have a job at least until April.”

Denick stopped going out to restaurants and scaled back on purchases, like the $20 phone-charging mat he picked up a few days ago.

The cancellation of major conferences, including South by Southwest, Austin’s annual tech, music and film festival, also has created ripple effects of lost gigs. For Elle Mahoney, a freelance stage manager and producer, the South by Southwest cancellation knocked out 10 percent of her income. She just got engaged but is not planning or picking a wedding date.

“Everything is just on hold,” said Mahoney, 35, who is reaching out to people she used to nanny for to help make up lost pay. “It’s just really hard for us to depend on money from gig to gig.”

Lisa Sato, who owns an events production company in Sausalito, Calif., has been inundated with calls from freelance technicians, stage managers and lighting designers asking whether she has “any work at all.” Of the eight events she was supposed to produce in March, all but one was canceled. She worries about the lack of a safety net for those workers. She said she has not seen anything like this in the event business, except for the eight months after the 9/11 terrorist attacks.

Sherry Caserta, who owns Travel Employment Agency in Kansas City, Mo., has fielded a similar flood of phone calls. She has been telling potential applicants their chances of landing a new job “are limited right now” as job postings are evaporating.

“The layoffs are already happening,” she said. “Most of these are last-hired, first-fired situations, but I’m really seeing it pick up this week in big cities: Atlanta, New York, Chicago.”

Workers expressed shock at how quickly they were laid off or saw gigs go away. Alex Brown, who made $12 an hour overseeing marketing for a boutique travel agency in Atlanta, learned Monday she was being laid off because of nosediving sales and a falling stock market. Her boss told her he would get in touch “when this all blows over.”

“Even with that, I really wasn’t expecting to get laid off so soon,” she said.

Brown, 22, is not sure where to find new work. She emailed her former manager at an upscale restaurant and plans to talk to her boss at a gelato shop, where she works one shift a week, to see whether she can get more hours. She is afraid those places will be struggling soon, too.

“I don’t even know where I should be looking,” Brown said. “Which businesses are actually going to be hiring long-term for this strange year ahead of us? Everyone is cutting back.”

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