In lieu of layoffs, many major companies bracing for a deep economic downturn have decided to furlough employees
Macy’s, AMC, and Marriott are among the companies that have furloughed employees amid the coronavirus pandemic. Photo: Courtesy of the media companies The coronavirus pandemic has already triggered an unprecedented surge in layoffs. As an increasing number of states have ordered all nonessential workers to stay home, a record number of Americans have filed for unemployment benefits.
In short, a furlough is an employer-mandated, temporary unpaid leave from work, which employers typically resort to as a cost-saving measure. Both public and private employees can be placed on furlough. But the specific terms of a furlough depend on where you work. You can be furloughed for as short as a few weeks, or as long as months. During this leave, you’ll likely retain your health-insurance benefits, though that’s not guaranteed.
“Unlike layoffs, furloughs reduce labor costs without adding new costs such as severance packages and outplacement services,” Jie Feng, an assistant professor in the Rutgers School of Management and Labor Relations told the Society for Human Resource Management. And when business is on the upswing again, “employers do not have to pay for recruiting, selecting, socializing and training new employees because the furloughed workers can pick up where they left off.
As the country reels from the economic toll of the coronavirus pandemic, various companies have announced that they’re furloughing employees: Macy’s, Kohl’s, and the Gap announced on Monday that they would be placing the majority of their staffs on furlough, joining a growing number of retail companies, such as Everlane and Nordstrom, to do so. Earlier in March, Marriott placed tens of thousands of employees on furlough.
Heading into April, with 6.6 million people having filed for unemployment benefits last week, the furloughs keep coming: On Thursday, Disney furloughed an undisclosed number of its nonunionized park employees, but committed to providing full health-care benefits and paying the premiums. Meanwhile, General Electric aviation placed half of its engine-manufacturing staff on four-week furlough as the coronavirus grounds flights. On Friday, Under Armour, Inc.
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