With retail stores remaining closed, companies are choosing to furlough more staff.
Macy’s, Gap, and Kohl’s have announced they are furloughing more employees as more stores close and switch to online ordering only. Last week, TJ Maxx and Marshalls shuttered online shopping for two weeks. Already impacted by withering sales, retail stores have had to adjust their business models like curbside pickup and online ordering to keep their businesses running. Many companies continued to pay employees for a couple of weeks, but faced with the prospect of closed storefronts for at least another month, they have made the hard decision to furlough most of their workforce.
Macy’s will be furloughing approximately 120,000 people, but is keeping online operations open. Gap will furlough 80,000 across all of its brands including Old Navy, Athleta, Banana Republic, Janie and Jack, and their respective factory outlet stores. Kohl’s is one of the only major department retailers that is still offering curbside pickup where allowed. Sadly, they will still end up furloughing up to 120,000 employees.
TJ Maxx made the even more drastic move on March 19 to close all its stores and shutter online shopping for two weeks, closing the Marshalls, Homegoods, Sierra, and Homesense websites. The company said it would pay all employees during the two-week closure and did not say if they planned to extend the closures.
Online shopping and curbside pickup have been the only way these retailers have been able to sell anything in the age of COVID-19. Most of these companies have had to freeze hiring, draw money off credit lines, and cut operations just to stay afloat. As the virus spreads, they could be forced to cease operations completely until the population improves. On April 1, the governor of Vermont told big box stores like Costco and Walmart to stop selling non-essential items like clothing, beauty, electronics, and home furnishings.
What are your thoughts about how COVID-19 is going to have a longterm effect on businesses and the economy as a whole? Tell us in the comments!