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The global pandemic of COVID-19 has taken a toll on almost every aspect of human life, especially the businesses and employment. Businesses are shuttered, and organizations are laying off a significant number of employees to manage costs and ensure longer endurance of the business.
The social distancing measures across the globe have resulted in increased burden over the businesses to reduce their operations. The downsizing of business operations is likely to have a material impact on the revenue and other financial aspects of the corporates.
We have been coming across multiple news from businesses that have implemented salary cuts, temporary stand-down of employees as well as lay-offs, especially in airlines, tourism, retail and entertainment and related businesses.
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Although the Australian Government has announced fiscal as well as economic stimulus packages to sustain business and aid employment scenario, yet the businesses are struggling to keep the normalcy in their business operations amidst demand crunch and supply disruptions.
Are there Opportunities in Retail Space?
As has been rightly said by Albert Einstein:
“In the middle of difficulty lies opportunity”
There has been some optimism flowing from the retail sector as retailers face the challenge to manage their services and ensure discipline while shopping in times of panic.
Flocking customers to the retail stores have turned out to be an opportunity for the retailers in Australia to showcase exceptional management abilities as well as intent to serve its people better, although widespread store closures have posed certain challenges as well.
WOW to Fill 20,000 New Roles
Seeking these challenging times as an opportunity; the Australian retail giant Woolworths Group Limited (ASX:WOW) shared its intention to fill up to 20,000 new roles across its supermarkets, e-commerce, supply chain and drinks businesses in Australia over the current month.
The Company intends to make fresh hiring with a view to enhancing its ability to satisfy the unprecedented demand for food and drinks across Australia and shall assist in scaling up online operations to support the changing shopping needs of the community as the health crisis continues to unfold.
The Company believes while the prevailing times are highly uncertain for several businesses across Australia as well as globally, it has a material role to play in keeping Australians employed during this time of crisis. The new roles offered by Woolworths under the hiring plan are expected to be of casual nature which shall ensure supreme flexibility for the workforce to respond to peaking demand and cover for existing team members who may not be able to work.
Moreover, Woolworths looks forward to increasing hours for standing team members as well as additional roles that are yet to be filled, with a focus on satisfying the needs of its customers and communities.
With extensive social distancing measures causing disruption in the supply chain and increasing uncertainties, the demand for the online order and home delivery services is likely to increase in the coming times.
The immediate hiring centers around the Company intends to redeploy its ALH team members that are impacted by last week’s mandatory hotel closure. ALH GROUP is an operator of more than 300 licensed venues and over 550 retail liquor outlets across Australia and offers a wide array of hospitality experiences encompassing electronic gaming, sports bars, bistros, restaurants, cafes etc.
By 25 March 2020, the Company had successfully placed approximately 3,000 individuals that were impacted, into fresh roles across Dan Murphy’s, BWS as well as Woolworths Supermarkets and looks forward to continuous expressions of interest.
The Company has been engaged in preparing for providing nearly 5,000 short-term roles to employees of Qantas Group that are compelled to be on leave without pay, involving over 1,500 in its distribution centres.
The mass employment drive announced by Woolworths shall also include short-term contracts for the people who are on leave without pay arrangements with other employers as well.
Moreover, the Company also intends to uphold similar streamlined application processes with the likes of Village Entertainment, Accor, Cotton On, Michael Hill Jewellers etc. and looks forward to producing thousands of roles of short-term nature that are accessible to employees from these businesses.
The Company has also paced up its screening work for the applications that were received through walk-in applications made in-store and Woolworths’ careers website.
The management of Woolworths, as well as employees on the ground level, have been at the forefront of implementing and ensuring flexibility in the operations of the business and have also brought hope for many Australians amidst such times of high uncertainty and worries.
KMD Implements Cost-Cutting Measures
In another instance, global outdoor and action sports company, Kathmandu Holdings Limited (ASX:KMD) has been actively pursuing decisive and immediate action on significant cost savings and structural cost reductions that are in line with the aid by government contributions and also enhances employee incomes where accessible.
Major actions taken by the Company include the following:
- The Company has already processed the applications and the same are underway to access the government wage subsidy for employees in New Zealand.
- Retail store and head office staff except a skeleton crew shall be stood down without a 4-weeks’ pay, but these shall have access to government assistance and leave entitlements.
- With government funding for the majority of employee salaries in France, employers are able to temporarily release staff.
- In North America, jobs are mostly on “at will” basis, creating room for efficient right-sizing of the business in that region.
Moreover, the Company is in consultation with its employees regarding the alternatives for team members to continue with reduced hours and salary.
Maintaining liquidity is a challenge in current times for the businesses, and for the same purpose, Kathmandu is implementing these necessary structural changes in the organisation. Citing the uncertainties about the liquidity of the business; the Company has suspended its dividend payments until the time when normal trading conditions are back.
KMD has confirmed that the impact of COVID-19 on its earnings has been minimal for the six months ending 31 January 2020 and further expects a significant unfavourable impact on the earnings in the second half of the current fiscal year.
The Company further looks forward to implementing aggressive cost-saving initiatives with a view to managing expenses and cash flow in line with sales performance wherever possible.
Unprecedented Jump in Unemployment Insurance Claims
The prevailing situation of coronavirus is estimated to wipe off millions of jobs across the globe. According to the United States’ Department of Labor, seasonally adjusted initial claims climbed to 6,648,000, with an increase of 3,341,000 from the revised level in the last week, reflecting the highest level of seasonally adjusted initial claims till date in seasonally adjusted series.
The Department of Labor has mentioned that the Administration remains proactive in ensuring minimal impact on the American workers including the rule of the paid leave provisions of the Families First Coronavirus Response Act and other work of the Department with the States.
Moreover, significant incentives for businesses have also been included in the legislation aimed at facilitating businesses to retain workers and continue paying them. Further, it is also expected that these incentive plans shall put businesses and workers in a healthier position to continue work and restart the economy once the virus is controlled.
