The new year arrived with a new job for Tyler Simon, who had high hopes for 2020. They didn’t last long.
“Once Covid-19 hit, things went from bad to worse really quick,” said Simon, a father of two in Summerfield, North Carolina.
A marketing specialist with a sales-training company, Simon lost his job along with several colleagues on April 7 -– less than two weeks into a state-wide lockdown to counter the pandemic. He says many who survived the firm’s layoffs saw their pay cut by 10%.
That’s happening all over the country.
A tsunami of job losses, which began among workers in restaurants, hotels and factories, is now reaching the offices of white-collar America — where analysts and engineers find themselves among the rapidly swelling ranks of the unemployed.
Within a month, some 22 million people filed for jobless benefits, in what’s shaping up to be the worst rout for U.S. labor since the Great Depression. Data due Thursday is forecast to show another 4.5 million joined the line last week.
A detailed breakdown by profession won’t be available for a couple more weeks. But it’s already clear that the layoffs span industries and income groups –- and they’re hitting many Americans who have never had to apply for such assistance before.
“What we’re going to be seeing is cutting deeper to the bone,” said Diane Swonk, chief economist at Grant Thornton LLP. “There is this sort of sense of nowhere to hide, and more and more collateral damage.”
White-collar employees largely escaped the initial wave of coronavirus layoffs, often because the nature of their jobs meant it was easier to do them from home.
But even companies that managed to stay afloat have seen a big squeeze on revenue and profits, as large areas of the economy are shuttered. That’s triggering a second round of job cuts or furloughs, with office workers taking a bigger hit this time.
And managers are taking other steps too. In addition to reducing hours, a common measure in recessions, they’re also slashing pay levels –- which is much more unusual, and may be an ominous sign for the post-virus economy.
Salary cuts billed as temporary could easily end up as a more permanent feature of payrolls, with employees finding they’re expected to work for 10% or 20% less than before, according to Gregory Daco at Oxford Economics.