When asked between furlough vs layoffs, most chief executives in the United States admit they plan to do both, according to new survey.
The survey, which explored the impact of the coronavirus pandemic on businesses, showed the decline in confidence among chief executives.
Findings showed that more than 80 percent said their business has been or will be substantially affected by COVID-19.
Moreover, about 54% admitted they may lay off or furlough employees, while 43% said they plan to reduce salaries, wages, or benefits.
Four out of five survey participants said they will postpone investment decisions and 43% said they are likely to experience cash-flow problems.
The survey was held from late March to early April by the business research group The Conference Board.
"In late March, CEO confidence declined to levels not seen since the height of the Great Recession," said Lynn Franco, senior director of economic indicators and surveys at The Conference Board.
"The sharp fall was driven by a dramatic deterioration in sentiment about the current state of the economy. So it comes as no surprise that more than 80% of these executives said COVID-19 has substantially impacted their business."
Many companies have already collectively laid off millions of workers. The number of US unemployment claims already reached 6.6 million last week.
Small businesses
Meanwhile, small businesses are receiving aid from the government. Last week, the U.S. Small Business Administration (SBA) announced that business owners can now apply for SBA disaster loans via their web portal.
In the US, there are an estimated 30 million small businesses. The SBA loan system can provide up to $10 million in loans that can become free grants if the businesses adhere to certain rules, such as using the money primarily for payroll.
United States President Donald Trump’s administration released new guidelines for employee paid leave. According to the US Department of Labor’s guidance for the coronavirus stimulus bill, companies with less than 50 workers can refuse 12 weeks of paid leave that the bill stipulated for those whose children are home from school or child care.
Meanwhile, employees can qualify for two weeks of paid sick leave and 12 weeks of paid family leave under the law. The stimulus bill also exempted employers from administering the paid family leave if it could hamper business operations. The law does not apply to companies with more than 500 employees.
The Department of Labor deems small businesses as exempted from administering the family leave if it would “cause the small business to cease operating,” if employee absence would create “a substantial risk” to the business or if there were not enough employees “able, willing and qualified” to fill in for the individual on leave. In addition, small businesses cannot refuse sick leave.
“This is much needed support ,and we want to make sure that every single small business can participate, and we want to assure the workers that if you don’t get the loan this week, there’ll be plenty of money for you next week,” said Treasury Secretary Steven Mnuchin.
