The COVID-19 crisis has obviously impacted the finances of many businesses and service providers, that is a fact.
But the reality is that many of those employers with serious cash flow problems now, have enough liquid assets and reserves to weather much of the storm.
There are also firms that have continued to make money throughout the crisis and those that will bounce back quickly. For example, HSBC has announced tens of thousands of redundancies worldwide, but still making billions in profit.
Why should they cut jobs just because profits are down on last year?
A quick analysis of the FTSE 100 shows that many businesses have continued to grow through the crisis are in a better position now than they were at the turn of the year.
Obviously, everyone thinks of supermarkets when this comes up and Ocado for example has seen its share price rise by over 60 per cent in the last six months.
But it is not just companies in that industry that are doing well. For example, Rentokil has seen its share price jump by nearly 30 per cent over the same period and AstraZeneca’s- pharmaceutical and biopharmaceutical company has increased by almost 25 per cent.
For many employers a crisis is falling profits and shaky returns for shareholders, but this does not mean that cuts to the wage bill are inevitable.
Often employers look to restructure merely to appease the markets, to show a sign of progress, or their ability to take control in a crisis. Ok, so profits maybe down and the bounce back may take some time, but why does this require permanent cuts to terms and conditions?
In some cases it’s hard to fight job losses and closures when dealing with businesses that were already on the edge, but this does not mean we have to accept permanent cuts to pay, terms and conditions for those that are going to survive.
The economic fall-out of COVID-19 requires temporary solutions, not permanent slash and burn.
It may take a while for the economy to bounce back, but it will take a good working partnership to get back to whatever the normal maybe in the future.
Rodney Sadd
South Holland & The Deepings CLP
