#Coronavirus forced job cuts at a third of small businesses

A third of the world’s small businesses slashed jobs as the coronavirus ate into their sales and forced many to shut down, a new survey shows.

The figures released Tuesday detail a bleak landscape for small merchants around the globe as they grapple with COVID-19 and the massive economic crisis it has caused.

Some 33 percent of small and medium-sized firms that were open in late May had reduced their workforces as a result of the pandemic, according to Facebook’s survey of 30,000 small business leaders in more than 50 countries and regions.

The job losses hit hospitality businesses especially hard thanks to virus-related lockdowns in many countries, with 54 percent of hotels, cafes and restaurants reporting cuts, the results show.

Businesses “which remain open have faced cash flow constraints within an environment of business closures and reduced sales,” says Facebook’s report on the survey, which was conducted from May 28 to 31 with the Organization for Economic Cooperation and Development and the World Bank. “The combination of these pressures has forced many to reduce costs and employment.”

Layoffs were also more widespread in poorer regions such as Sub-Saharan Africa and East Asia than in wealthy Western countries, the survey found. About half of small and medium firms in Egypt, Indonesia and Colombia had to cut their headcount, compared with 29 percent in the US and 14 percent in France, according to the report.

Moreover, nearly two thirds of surveyed businesses — 62 percent — said their sales had fallen in the previous 30 days compared with the comparable period last year. A majority of those struggling merchants reported sales declines of 50 percent or more, “exacerbating the cash flow constraints that [small and medium businesses] face even in normal times,” the report says.

And 26 percent of the firms said they had to close between January and May — a rate that grew to more than 50 percent in places such as Bangladesh and Ireland, according to the results.

Close to three quarters of the businesses that were closed at the time of the survey expected to reopen as officials eased pandemic restrictions, Facebook said. But a resurgence of the virus has forced some parts of the US to roll back their reopening efforts.

“The path to recovery is uncertain and many may need support from governments or other institutions to get back on track,” Facebook Chief Operating Officer Sheryl Sandberg said in a statement accompanying the report. “We hope this report will help identify areas where that support can make the biggest difference.”