A survey taken between September and October 2020 shows that as many as 20% of New York State companies are likely to lay off staff between now and the end of July. An incredible one in five NY firms will be processing job cuts to stem up losses incurred during the year-long pandemic crisis.
On a global scale, the survey showed that 90% of worldwide businesses face the same financial crisis and are looking for ways to save costs with staff cuts at the top of the list. The layoffs are predicted to be taking place in most small and medium-sized firms all across the world. If ever the phrase ‘in it together‘ was in doubt, these events will surely ring true to people that it is not only Americans suffering.
In the US, the survey was conducted among 9,693 firms across the country, among which 216 firms were from New York. The survey also reported that 50% of the employers surveyed are grossly unprepared and are not ready to downsize their workforce. In a statement taken from small business owner Jarod Hart in Paterson, NJ, he said, ” I have no idea how I can make cuts to my workforce and continue to trade at the same time. I honestly cannot see a future for my firm right now“. The survey shows that only 30% of the firms planned to hire recruits by June 2021.
Worryingly, the survey indicated that half of the businesses who responded expect a fall in revenue this fiscal year. On the contrary, only 36% of firms are optimistic and expect revenues to increase. The other 20% of the surveyed firms are still in a dilemma regarding the facts and figures could not plan either way.
Significant lack of customer demand in products and services is the primary reason behind the companies’ challenges. Eric Alexander, the LI Main Street Alliance’s founder, expressed his concern and said that though businesses are struggling a lot, people are still committed to working together to overcome the hurdles. Earning money is any businesses’ main objective, and taking loans to see them through will likely only burden them.
The New York Fed’s 2020 result on Small Business Credit Survey showed the pandemic’s impact on the economy. In total, 80% of the businesses saw an abrupt decline in revenue.