Coronavirus: China’s fear of mass job losses looms large as Covid-19 takes toll on economy
- With the outbreak wreaking havoc on economic activities, firms are faced with tough decision whether to reduce staff levels and wages to be able to survive
- President Xi Jinping said this week that local governments must work hard to ‘ensure the general stability of the job market’
As more people return to work across China following extended holidays or work from home arrangements to combat the coronavirus outbreak, some are now worried the resulting economic slowdown will result in job losses.
The coronavirus, which causes the disease now officially known as Covid-19, had led to the death of over 1,300 people in China, while infecting around 60,000. It has wrecked havoc on economic activities across the country, with firms faced with tough decision whether to reduce staff levels and wages to be able to survive.
The company, which employs thousands of staff to run around 1,900 hotels and hostels globally near popular tourist attractions, many of which have all been forced to close due to coronavirus fears, blamed plunging revenues for the decision.
The letter from CEO Zhang Qiang was partly in response to reports last week that the company planned to start massive lay-offs, with LvYue Group later confirming job cuts due to the deteriorating business conditions would be less than 20 per cent.