Happy weirdest Mother’s Day ever to all the moms out there, especially mine, whom I’m not sure when I’ll see next (besides on Zoom, of course). To everyone else, hang in there. Here’s what you need to know in business and tech for the week ahead.
What’s Up? (May 3-9)
The April jobs report is out, and it’s ugly. The economy shed 20.5 million jobs, pushing the unemployment rate to 14.7 percent. For context the total number of jobs lost in the last recession was 8.7 million, and unemployment peaked at 10 percent in October 2009. We haven’t seen numbers like this since 1933, during the Great Depression. And if anything, this report is rosier than the reality, as it doesn’t reflect the millions of people still working who have had their hours slashed or their wages cut.
Speaking of Job Losses
In our new world of social distancing, it’s no surprise that the sharing economy is a shambles. The home-sharing company Airbnb, which had planned to go public this year, laid off about 25 percent of its employees last Tuesday and slashed its revenue forecast for this year to half of what it made in 2019. (Vacations? So last year.) Lyft and Uber also announced major staff cuts, and Uber reported that its ride-sharing business was down a whopping 80 percent in April. Adding to their troubles, both companies are being sued by California’s attorney general for misclassifying drivers as independent contractors. If the companies lose, they could owe those workers hundreds of millions of dollars.
Please Turn to Chapter 11
First J. Crew filed for Chapter 11 bankruptcy protection. Then, it was Neiman Marcus and Bergdorf Goodman. Who’s next? The troubled companies say that they still plan to reopen stores once it’s safe to do so and that they’ll operate “normally” throughout their debt restructuring. But it is a strange new world for retailers, many of whom were struggling to maintain their brick-and-mortar businesses even before people were ordered to stay home.
What’s Next? (May 10-16)
Creaking Back to Life
Certain businesses were allowed to reopen in 21 states this past week. But are government orders enough to make people feel safe going out to shop, eat, work out and get their hair done — especially as the virus is still spreading and lines for tests are long? In Georgia, the first state to do widespread openings of high-contact businesses like restaurants, gyms, salons and tattoo parlors, data shows that many business owners and consumers have been slow to poke out their heads. They may have good reason, as public health officials have warned that restarting the economy will lead to a wave of new infections.
Amazon took another public relations hit when one of its vice presidents, Tim Bray, announced that he had quit “in dismay” over the recent firings of employees who protested gaps in the company’s response to the coronavirus, which he called “evidence of a vein of toxicity running through the company culture.” He specifically criticized the firing of a Staten Island warehouse worker who led a protest in March calling for more safety equipment and protections against infection. Nine Democratic senators, led by Elizabeth Warren, are now questioning whether those firings were actually retaliation against whistle-blowers — a violation of labor laws — and have asked Amazon to provide more information.
Hello, Justices Calling
The Supreme Court is scheduled to hear a dispute involving subpoenas for President Trump’s tax and financial documents, and it will be broadcast live this coming Tuesday as part of the court’s first ever round of oral arguments by teleconference. House Democrats have long sought access to Mr. Trump’s records as part of an investigation into his connection to hush-money payments made during his 2016 presidential campaign. But the president has blocked their efforts at every turn, and his lawyers have argued that he is immune from all criminal proceedings and investigations while he remains in office.
With everyone hunkering down at home, the demand for canned beans is booming — which means the metal can industry is, too. And it’s a good time to think about meat alternatives. An outbreak of coronavirus infections at meatpacking plants has disrupted the food chain, causing hundreds of Wendy’s locations to run out of hamburgers and grocery stores to put restrictions on purchases of beef, poultry and pork. And in an astonishingly brazen move, Adam Neumann, the former chief executive of WeWork (another start-up all but destroyed right now), is suing SoftBank for withdrawing an offer to buy up to $3 billion in WeWork stock from Mr. Neumann and other shareholders.