As social distancing and stay-at-home orders continue due to the escalating COVID-19 pandemic, Simon Property Group has furloughed about 30 percent of its workforce, or about 1,200 to 1,400 people, according to a report on Tuesday (March 31) in CNBC.
The biggest mall owner in the U.S. is having to deal with the shuttering of all of its properties due to the coronavirus pandemic spreading across the country and around the world.
The furloughs affect employees at Simon’s Indianapolis headquarters as well as at its malls and outlets nationwide, a source familiar with the situation told CNBC. An unspecified number of workers were permanently laid off as well.
The company’s CEO David Simon is not taking a paycheck during the pandemic, the source said. In addition, upper management salaries are being slashed by up to 30 percent.
The company’s headquarters houses about 1,000 of its approximately 4,500 employees, 1,500 of which were working part-time, according to Simon’s latest annual filing, CNBC reported.
The retail industry has been hit especially hard by the pandemic. Hundreds of thousands of retail employees have temporarily lost their jobs, from Gap and Macy’s to Kohl’s and JCPenney.
Neiman Marcus temporarily laid off the majority of its 14,000-member workforce and has been on the bankruptcy radar of many analysts because of its $4.3 billion in debt.
“Unlike past recessions, this does not seem like companies are trying to figure out how to run their businesses on lighter operations … or adjust their expense structure to their revenue base,” BMO Capital Markets Analyst Simeon Siegel told CNBC. “This seems like companies are trying to press pause on the world.”
Macy’s said on Monday (March 30) that it was using the “absolute minimum workforce needed to maintain basic operations.” The retailer has temporarily laid off most of its 130,000-person workforce.
“While the digital business remains open, we have lost the majority of our sales due to the store closures,” a Macy’s spokeswoman told CNBC.
Kohl’s told the news outlet it would be laying off about 70 percent of its workforce. JCPenney said it would temporarily lay off most of its hourly employees. Starting Sunday (March 29), the company told CNBC, a “significant portion” of its employees at its Texas headquarters would be furloughed.
Retailers worldwide are closing their doors and cutting back on their hours to help curtail COVID-19. The furloughs are the newest setback for U.S. workers, as moves to keep people at home to stop the coronavirus’ spread have brought multiple sectors – including restaurants, hotels and entertainment venues – to a halt.