[Asia Economy Reporter Kwon Jae-hee] From the aviation industry, which has suffered the most severe impact due to the novel coronavirus infection (COVID-19), to the banking sector, widespread layoffs are now in full swing across various fields. In the banking sector, which has recorded the highest level of loan losses in over a decade, the last resort of layoffs, previously postponed, has finally been implemented.
United Airlines, one of the three major U.S. airlines, announced on the 8th (local time) that it notified approximately 36,000 employees that they could be subject to temporary layoffs starting October 1. This represents 45% of its U.S. workforce and about one-third of United Airlines' global employees.
By job category, there are about 15,000 flight attendants, 11,000 customer service staff, 5,500 maintenance personnel, and 2,250 pilots.
United Airlines stated, "Not all of these employees will be laid off; the final number will be determined in August, considering voluntary retirement and other circumstances."
American Airlines also hinted at layoffs, mentioning that up to 20,000 employees are in excess, while Delta Air Lines notified 2,500 pilots of temporary layoffs last month.
Wells Fargo, one of the four major U.S. banks, also announced plans to reduce its workforce by thousands starting at the end of the year. Wells Fargo has about 263,000 employees, the largest among U.S. banks. The exact scale of the layoffs has not been determined. Bloomberg reported that if these layoffs occur, it will be the first major layoff case among U.S. banks since the COVID-19 pandemic.
Until now, the U.S. banking sector had postponed layoffs as a last resort while preparing for loan losses. However, with the four major U.S. banks?Wells Fargo, Citigroup, JPMorgan Chase, and Bank of America?expected to collectively report nearly $25 billion in loan loss provisions in their Q2 earnings next week, layoffs have become inevitable. This amount exceeds the $24 billion loan losses recorded in Q1 and is higher than the loan losses during the global financial crisis over a decade ago.
Wells Fargo's Chief Financial Officer (CFO), John Shrewsberry, stated in June, "During this year, the bank will need to implement plans to reduce workforce and cut expenses, including real estate."
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