fortune--2020-04-27--The fate of the USPS may be on the ballot in November

The U.S. Postal Service has made it explicitly clear: Without a Hail Mary pass from Congress, it will likely run out of money before September of this year.
In order to stay afloat, advocates for the Postal Service are asking Congress for $25 billion in immediate assistance, a $25 billion modernization grant to overhaul infrastructure, and $14 billion in debt forgiveness. The Postal Service Board of Governors, which consists of three Republicans (all of whom were appointed by President Donald Trump) and two Democrats, unanimously approved of the ask earlier this month.
Ideally, that would be enough to sustain the Postal Service until the election of presidential candidate Joe Biden, who has said he plans to back legislation to support the post office and keep it public.
“The U.S. Postal Service is an important part of American life. But, with Donald Trump in the Oval Office, our post offices are under attack,” Biden wrote in a letter to his supporters last week. “Trump has called for rolling back protections for postal workers and privatizing the USPS…Trump’s plot to privatize the USPS couldn’t come at a worse time,” he continued. “So we need to take action now to protect the Postal Service.”
While the post office has not been included in any stimulus packages so far, Congressman Emanuel Cleaver of Missouri still remains hopeful that the Postal Service will get something in the next round of funding. He sent a letter—along with 122 of his congressional colleagues last week—to House leadership, demanding a bailout.
“If the Postal Service is privatized, rural America will be traumatized,” he tells Fortune. “It means that rural America, which already thinks it’s being ignored, will be given a clear and unambiguous sign that they’re right. That they’re not only ignored by the Congress of the United States but that they’re being placed in harm’s way. So not only do they not get mail, they don’t get medications, they don’t get the opportunity to communicate.”
In a briefing with members of Congress earlier this month, Postmaster General Megan Brennan outlined the full extent of the problem. While the Postal Service was losing money at an unsustainable pace before the COVID-19 crisis, it has seen an insuperable and precipitous drop in mail volume since.
There was a 5.3% decline in mail volume, said Brennan, during the first month of the pandemic in the United States. By April, it had grown to 30%. It will only get worse, she predicted: At the end of the third quarter, it will be a 50% drop, and at the end of quarter four, 57%. For this fiscal year, which ends Oct. 1, the Postal Service is predicting a revenue loss of $13 billion, the result exclusively of COVID-19. That’s on top of the nearly $9 billion the USPS had been losing annually before the pandemic.
Post office workers are considered essential during COVID-19 shutdowns. Over 1,800 postal workers have either tested positive or are presumed to be positive with the virus, and there have been over 30 deaths related to COVID-19, according to union officials.
Vermont senator and former presidential candidate Bernie Sanders held a virtual town hall last week with postal union leaders. “At this moment,” he said, the USPS “is facing very difficult challenges.”
But the latest congressional relief package, signed into law by the President on Friday, when he went out of his way to call the USPS “a joke,” provides no support for the Postal Service.
“As far as I’m concerned the Postal Service got screwed three and a half times now,” said Paul Hogrogian, president of the National Postal Mail Handlers Union.
If additional funding is not provided, the USPS would have no way forward without significantly reducing staff and cutting some services. The post office currently employs 640,000 staffers, many of whom are veterans and people of color.
The Postal Service is required by the constitution to serve everyone in the country equally and with uniform rates. They are the only universal provider of mail service and have been a low-cost anchor for the mailing industry, helping to keep private mail service rates down. A recent analysis by the Institute for Policy Studies found that, without the USPS, 70 million more Americans would have to pay hefty surcharges for deliveries.
If the Postal Service were to halt some or all of its deliveries, “rural America would be left out of the equation or be forced to pay exorbitant prices,” explained Hogrogian. Prescription drugs, Social Security, and pension checks would no longer be directly delivered to them, he said, noting that 40% of Americans still pay and receive bills through the U.S. mail.
“So FedEx and UPS get to cherry-pick what markets they want to play in, and if it’s unprofitable or too remote or too expensive, they get to not do it,” said Rep. Gerry Connolly, chairman of the Subcommittee on Government Operations.
“This isn’t just a nice thing to do for the Postal Service. This is essential to every household and every business in America that counts on daily delivery of their prescription drugs, foodstuffs, medical equipment, supplies,” said Connolly. “As we speak, people are ordering masks through the mail, medical supplies, and prescriptions, and we’re even adding to the burden by voting through mail.”
The only way to save the Postal Service, said Fredric Rolando, the president of the National Association of Letter Carriers, is to participate in the upcoming presidential election and vote for Biden. Rolando said he’s focused fully on short-term measures to keep the Postal Service alive, but even potential bailout money won’t provide long-term relief.
The USPS is currently the most trusted government agency in the country with a 90% approval rating divided almost equally among both Democrats and Republicans. While the agency is federally run, it has not received taxpayer funding for more than 30 years and is considered financially independent.
But the agency has been rapidly losing money since a 2006 law, passed with the support of the George W. Bush administration, required the agency to pre-fund employee retiree health benefits for 75 years in the future. That means the Postal Service must pay for the future health care of employees who have not even been born yet. The burden accounts for an estimated 80% to 90% of the agency’s losses.
Postal advocates believe that the pre-funding initiative, which they call “onerous” and “draconian,” was intended to force the Postal Service to privatize. They also say that without the stimulus money, taxpayers will be forced to pay for retiree benefits anyway.
“The line in 2006 was that the Postal Service has to pay upfront now because ‘we’re not sure if they’re going to be around in 20 years, and then the taxpayer will be stuck with the bill,’” said Hogrogian. “But that’s exactly what’s going to happen now if we’re not given this infusion.”
And while $50 billion plus debt forgiveness to the tune of another $14 billion may seem excessive, Connolly said perspective matters, especially in light of the $2.2 trillion stimulus bill recently passed by Congress. “It’s a big ask, but you have to put it into context,” he said.
“Think about the airline industry: Here’s an industry that gouged customers over the last five years to maximize profits, and they’ve had record profits over the last five years. And what did they do with those profits? They used $42 billion collectively to buy back stock. Not a productive activity,” said Connolly. “And then when the pandemic hit, they came hat-in-hand asking for $50 billion for a bailout. So if we can do that for the airline industry, and we did, then we can certainly do something comparable for the Postal Service.”
There was initial bipartisan interest in a bailout of the USPS by Congress, but according to reports by the Washington Post, Trump and Treasury Secretary Steven Mnuchin stepped in and threatened to veto the entire bill if it included the final agreed upon $13 billion direct grant to the USPS. Instead, they allowed only an additional $10 billion loan from the Treasury, but that comes with strings attached.
Connolly said that the loans taken from the Treasury usually work to take autonomy away from the USPS and bring it closer to privatization. “We are very worried that Treasury will pull our arm, and we’re going to resist it,” he said. “Mnuchin [and the President have] an agenda. You’ve got to remember that they don’t like the Postal Service as conservative Republicans because it’s big, it’s quasi-governmental, and it’s unionized.”
The Trump administration is supportive of privatizing the post office, and Hogrogian said that he was upset by “the shamefulness of them trying to use this crisis to carry out their political agenda, rather than set good policy on behalf of the people of this country.” A 2018 report written by a Treasury Department task force recommended selling off parts of the USPS to the private sector.
The Trump administration’s attempts to use the Postal Service as a “fiefdom” for “long-term political ambitions,” said Cleaver, “gives off a bad odor.”
The President has long advocated against the Postal Service. He does not support vote-by-mail initiatives as a response to the COVID-19 crisis, which he falsely claims would lead to an increase in voter fraud, and he also believes that the USPS should charge Jeff Bezos and Amazon more money for mail services than they do. The President reportedly personally pushed the Postmaster General to double rates for Amazon deliveries.
Still, Cleaver thinks there is a way to negotiate a bailout into the fourth stimulus bill. “It depends on how desperate we are to get the stimulus through, and it also depends on what else is on the table,” he said. “We’ve been meeting almost daily discussing it. Now it’s reached a point where people who are interested in getting that rural vote are going to have to think deeply about how they’re going to vote on this.”
Connolly also thinks negotiation is possible. “We had great success in the CARES Act in injecting things that the White House and Secretary Mnuchin and Senate Majority Leader Mitch McConnell did not want to accept,” he said. Democrats, for example, were able to negotiate $150 billion for state and local governments and $400 million to help electoral boards and support voting by mail.
Negotiations for stimulus bill four are currently in committee.
“You know, we have a divided Congress and a divided government, and to get things done there’s going to have to be give and take,” Connolly said. “Republicans and the White House are going to have to give postal relief, and they’re going to have to put their agenda aside for the sake of the country.”
More politics coverage from Fortune:
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Why charging members of Congress with insider trading is so fraught
—To fight tomorrow’s pandemic, we need to think like the military today
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: As unemployment skyrockets, the labor market’s future looks grim
Get up to speed on each morning with Fortune’s CEO Daily newsletter.


fortune--2020-04-26--‘Every mayor will tell you they’re being overwhelmed by good intentions’—A Q&A with Steve Davis on c

‘Every mayor will tell you they’re being overwhelmed by good intentions’—A Q&A with Steve Davis on coronavirus efforts

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Steve Davis stepped down from his role as the CEO of PATH, the Seattle-based global health nonprofit with operations in more than 70 countries, at the end of 2019. But Davis, who is a lecturer on social innovation at Stanford University and just finished writing a book, quickly found himself fighting on multiple fronts in the world’s battle against COVID-19.
A co-chair of the World Health Organization’s digital health technical advisory group, Davis has been active in supporting the global body’s pandemic response efforts. A member of the Center for Strategic and International Studies Commission on Strengthening America’s Health Security, Davis was also involved in briefing US political leadership on the novel coronavirus in early February. In Seattle, he’s deeply involved, too, in part through the work of Challenge Seattle which has brought together the public and private sectors to support the city’s efforts. (Read Fortune’s feature on Seattle’s pandemic response here.)
Davis spoke to Fortune earlier this month about the pandemic, the problem of too many well-intentioned tech companies, and the urgent need to share—rather than reinvent—local outbreak response strategies.
This interview has been edited for clarity and length.
How have you been involved in responding to this pandemic?
I’ve been pulled in, actually more than full time, between the regional response and the global response to the pandemic. Regionally, as a Challenge Seattle member and engaging with the former governor and the mayor and political leaders on a wide range of things to help organize. And then globally, I’ve spent most of my time because I’m the co-chair of WHO’s digital health technical advisory group. Dr. Tedros [Adhanom, Director-General of the WHO] asked me to come to Geneva a couple months ago when this started breaking out but I chose happily to stay and do Zoom calls in Seattle and not in a hotel in Geneva. So I’m mainly working with the WHO and a variety of others on private sector engagement and tech company engagement. There are a lot of offers to help, which is wonderful, but there needs to be some coherence there.
Tell us about the WHO work. What are you seeing in terms of technology and its role in supporting this pandemic response?
This has truly been a phenomenal digital pandemic. Everyone is on Zoom and online education and all that, but also the ways that we’re able to bring the full arsenal of digital tools against it—everything from the modeling and predictive tools, everybody knows how to visualize the flattening curve, to a lot of interesting telemedicine tools and contract tracing tools.
I’ve been the co-chair of this commission for six months or so. Through the chief scientific officer, Dr. Soumya Swaminathan, we’re engaged in calls working with a great group of people from around the world. As COVID started becoming more apparent around the first of the year—the people from China on the commission were fully on COVID then—we were very aware that there was a lot to be done. And by January or early February, we were pivoting our conversations—What do we need to be doing? How do we set ourselves up? It became apparent that this was getting to be a bigger and bigger problem globally, and the next thing I knew I was pretty much doing this full time.
Our goal has really been, one, to provide advice to really help support the strategic response by WHO and member states around the world in terms of what kind of digital and data capabilities they need and what tools are out there. We’re creating a clearinghouse to make it more accessible, particularly as we go into more vulnerable states and resource-poor settings where this is certainly going to emerge even worse. So, how do we keep from reinventing the wheel and everybody creating their own tool?
The other is bringing together private sector leaders in technology. We held a roundtable I helped chair a couple weeks ago to have a serious conversation. A lot of people are offering to do all sorts of things. There’s no lack of enthusiasm and willingness. But we need to create a stronger agenda on what’s really needed because it’s somewhat of—you’d almost call it a luxury problem. We have so many ideas and big companies, small companies, hackers, social entrepreneurs saying, ‘Here’s this tool’, ‘Here’s this tool,’ ‘I’ve developed this app.’ It has the risk of being a liability. African ministers of health are saying, ‘We don’t even know where to start, and we’re going to Twitter to figure out what works.’ And that’s across not just patient-facing things like contact tracing or testing, but it’s supply chain management, it’s communication to your citizens, the broad range of things that digital tools can help with.
How is the world managing that?
How they’re managing is pretty crazily to be honest. Every public health department or mayor will tell you that they’re being overwhelmed by good intentions. There are efforts, and we’re trying to do it at the global level, to create and/or support a network of clearinghouses. The state of California has launched something similar to say if you have ideas, bring them here, and then [we’ll] try to vet them. The problem, of course, is who and what is the qualification for vetting. This is where WHO gets involved because a lot of people want to be endorsed by WHO, and WHO simply doesn’t have the capacity at this moment to do a lot of that. We’re trying to figure out, how do we support this network of clearinghouses? A lot if it is fairly random. Here in Seattle, we’re lucky that the Department of Health is throwing those ideas over toward the Gates Foundation to say ‘Can you help us select here?’
What we don’t want to do and what we learned in the Ebola crisis really profoundly is that introducing a new tool or a new application, even if it’s really effective and cool, is not easy to do in the best circumstances. Anytime you do that, particularly at the systemic level, it requires a lot of change management and reeducation. Doing that in Africa in the middle of a pandemic is not easy to do at all. So one of the things we’re particularly keen on, while we appreciate all the new innovations, we’re trying to really support African ministers of health to say: What are the things that are already being used? And how can you leverage those where you’re not trying to introduce so much change management?’ That’s a critical area.
But then there’s been some really nice stories of success. Tencent in China developed a great app that is citizen-facing and quite comprehensive about the disease—what to do, what’s going on in the region, etc. Of course, they were able to do some things with their rules [in China] that we can’t do, but we’ve actually seen that app, based on our efforts, being deployed in Hindi and modified for the Indian context. And then we’ve actually connected it into what WHO has created so we’re seeing some aggregation or synthesis. But you can imagine the variety of things—I’m being pitched 10 or 15 times a day by people. Some pretty amazing ideas with some really good thinkers behind it. Some of it as fundamental as what is the simplest way to help contact tracers keep track of their material and make sure that data is interoperable with the health system.
How are you thinking about where we are in the course of this pandemic? And how do you expect the situation will play out, particularly in more vulnerable countries?
It’s the billion-dollar question. I’m not an epidemiologist. I thought that we would be facing this longer out. The rapid speed at which this really turned from, ‘Okay, there’s a problem over in China,’ into ‘Wow, look at what’s going on in the world,’ it’s just really extraordinary. Now, in hindsight, you think of epidemiology, we were probably naive about that. It wasn’t unpredictable at all. People have been saying this. I’ve been on studies and commissions, I’ve been on stages at Davos saying this stuff is going to happen. But, just suddenly it came and the bizarreness of it—you know it’s easy to sit as a privileged white guy here in Seattle on stages of Davos saying, ‘This is what we ought to do,’ but then suddenly I’m sitting and telling my own son he needs to wear a face mask to go to work today. That kind of pivot is really jarring and humbling and actually quite good for us in the long run to understand how this turned the world upside down.
But, along with most public health leaders, I’m very concerned about what this next wave looks like. We’re not going to have a vaccine for probably 18 months or so. Maybe there will be some breakthroughs, but I’ve been involved with PATH—we have the biggest portfolio of vaccines for the developing world—and it takes a long time to get them deployed. So, we’ve really got to double down on not just getting the vaccine but figuring out manufacturing ability and how billions of people get it quickly. It’ll take a while. What’s going on Africa and India and parts of South Asia—the good news is they’re jumping on it faster than we did by far. The U.S. will be seen as the outlier on almost every level at the end of this. We’re seeing our numbers of both deaths and cases are the highest in the world because we didn’t do what we needed to do as a country fast enough.
So the good news is, they’re on it. The problem is, as you can imagine, the context is just so different. Social distancing in a township in South Africa is pretty hard to do. The amount of testing capability is minimal. I think Bill Gates and others and I are very worried about this potential humanitarian crisis we face in the next six to 12 months. I was on a call of the [CSIS] commission with people who are very close to this piece of that puzzle, and they’re very worried that this could be a humanitarian crisis beyond what we’ve ever seen.
Are there lessons from recent Ebola outbreaks that are instructive for this moment?
I talk with colleagues from Africa about this every day. They say with Ebola we learned things like no matter what tool you’re using you need community engagement. It all starts there. We learned that the hard way over and over with Ebola where the SWAT team coming in is required, but unless you have a community supporting you and translating and interpreting what this means, the community can really reject it. The idea to be smart about how aggressive you are with new tools was really critical. You have to plug into existing infrastructure. With Ebola, we learned more than anything—I’m looking at it through a digital lens— the tool is great, but unless you’ve got human capacity and, and almost a culture of data that is authorized to actually make decisions based on data, it doesn’t matter how good your data tool is.
I don’t think Ebola is terribly instructive on a lot of the other pieces. We actually learned a little bit better about contact tracing there but this is such a different disease, the way it spreads and also frankly and happily it’s not as fatal. With Ebola, the fatality rate is so high once you get it, whereas here—I don’t mean to diminish the death at all—but it’s so much more about overwhelming the health system. That’s where the risk is in Africa.
How would you assess Seattle’s response?
There will be a million different reports and commissions and studies about who did what when and who is responsible, but certainly we waited too long. Everybody did. We didn’t realize, once the first case was exported here, just how sort of impossible it was going to be to contain it, which I think was the larger story.
I’m on a national health security commission—the [Center for Strategic & International Studies] has a bipartisan congressional commission on national security, and, on the day of the acquittal of Trump’s impeachment, we were having this odd hearing in the Senate hearing room with a variety of congressmen and senators. What was interesting is we were still talking to congressmen and senators of both parties and people from the administration that this idea that we’re going to contain this— we needed to move from containment strategy to mitigation. I think that idea that we could keep containing this somehow just permeated for too long almost everywhere in this country.
It happened here in Seattle, but then, I think, quickly once the Life Center cases started, there was a quick call like ‘Whoa, this is not going to go away.’ I think Seattle and Washington State will end up getting pretty good scores on pulling people together very quickly, getting some of the business community and the political community and the public health community aligned as much as that’s possible to do. Getting big businesses to get people to start staying home reasonably early. By early March or late February, I was on calls about PPE. So once it started and we got our act together, we flattened [the curve] pretty well. But it’s still out there, and it’s still a problem. I’m also part of the task force on the recovery plan. And it’s much harder, even in a state like Washington, to figure out how to open this up than to shut it down.
How are you thinking about the timing and process of recovery?
The governor is coordinating with governors of other states, but he’s really looking hard at balancing the economic issues and the public health issues. We’re fortunate in this state to have some really great leadership across the board. I give a lot of credit to the former governor [Challenge Seattle CEO Chris Gregoire]. But we also happen to be a place where you’ve got some great universities and great foundations and public health organizations. Our approach isn’t business versus public health—in fact, if you don’t do the public health right, it will hurt business. On the other hand, the business community has a voice. So we’re working with the governor’s office to try to recommend what is the right criteria and the right pace and the right approach for turning on the dials. It’s not a switch—it’s a bunch of dials.
We’re working also on how we set up a really rigorous testing and contact tracing capability that has more surge capacity. And we’re very concerned, just to be really clear, about the equity issues in all of this. This is already an epidemic that has super exposed the flaws in our own health systems— which show how a lot of vulnerable people don’t get services, aren’t getting insured. The numbers are beginning to show the demographics of this.
It’s much easier to say Microsoft go back on because you can all work from home, and that’s great. They’ll probably be working from home for quite a while, but it’s much harder to say mom-and-pop grocery or janitor, you can go back to work. So those things we really have to work on.
How will the contract tracing work?
It’s probably a little premature. That will be driven by the Department of Health, but there is a conversation to create some surge capacity, and we’re putting together a proposal that will rely on both professionals and volunteers. It’s going to require a committed workforce for a certain period of time. When you look around the country and what’s happening, there’s sort of a fortuitous thing about these kind of programs where you are kind of—I hate to say it—but are hitting two birds with one stone. We need to have a surge capacity for contact tracing, and it needs to be trained and managed by the Department of Health and overseen. But we also have a lot of people from community health centers and others that are laid off or unemployed right now, so trying to pivot that kind of workforce into this kind of work will be important.
Globally or locally, what issues are top of mind for you right now?
I do worry that this is a global pandemic—and thankfully global leadership is on it—but it’s playing out very, very much locally. One of the things we’re seeing is that the lack of connectivity between local solutions is slowing us down. I’m sitting here on the Washington State recovery plan, and we’re like, ‘Can we just like sit down with California or Massachusetts and Oregon and do it together?’ Obviously you can’t really do it that way, but we do need to do a better job right now—whether you’re talking about the recovery plan or sharing information about technology tools—because I think we’re just reinventing the wheel over and over and over and it’s painful. In a way it’s unavoidable in the middle of a crisis, but if I think as we go into this post-peak recovery, or whatever they want to call it, we need to bulk up our sharing and knowledge. Certainly we’re trying to encourage open sourcing of tools and things like that so everybody doesn’t have to reinvent.
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fortune--2020-04-28--Q&A: Lawrence Wright on his new pandemic novel ‘The End of October’ and what we can learn from coron

Q&A: Lawrence Wright on his new pandemic novel ‘The End of October’ and what we can learn from coronavirus

After Air France-KLM bailout , Germany ’ s Lufthansa could be next

Lawrence Wright has already written 10 nonfiction books, including the deep insider look at Scientology, Going Clear: Scientology, Hollywood, and the Prison of Belief, and The Looming Tower: Al-Qaeda and the Road to 9/11. So it’s no surprise that that The New Yorker staff writer would follow that up with a captivating narrative about a mysterious new deadly virus sweeping the planet.
Except this time, the book is a work of fiction.
If it had been released this time last year‚ or even just a few months ago, the riveting thriller The End of October (Knopf) would have been interesting for anyone looking for an escapist page-turner. (Although given the subject matter, maybe not the best travel read.)
Yet in the age of the coronavirus, it is no longer escapist. But it’s still a gripping tale. Readers might find themselves holding out for a real-world hero like Dr. Henry Parsons (think Robert Langdon, but working for the World Health Organization and without any of the womanizing), who races around the globe to track down a novel strain of influenza as it spreads like wildfire and threatens to bring the planet to a standstill. (Sound familiar?)
Fortune recently spoke with Wright about the inspiration for his latest work, what the research process was like, and his reaction to just how frighteningly prescient it has turned out before it publishes today. (And as many authors publishing books this spring have encountered, the launch has been retooled as bookstores across the country remain closed to guests. So the book launch event has been moved online via Zoom and EventBrite.)
The following (spoiler-free) interview has been lightly edited and condensed for clarity.
“The End of October” follows a mysterious, acute, and highly contagious disease as it spreads worldwide, dismantling institutions and decimating the population in its wake. Courtesy of Knopf
Fortune: Without giving anything away, given how many recent, actual geopolitical and public health events are referenced within the book, the plot takes place as close to present day as possible—making the similarities to real-world events (we’ll get to that) all the more ghostly. So I have to ask, when did you start writing this book? What inspired it?
Wright: This book actually started off as a screenplay for Ridley Scott a decade ago. At the time, I hadn’t solved the story, and to be honest, I hadn’t done enough research. Still, the idea of a massive pandemic haunted me, and in 2017, I decided to write it as a novel. This time, however, I plunged into the research in earnest, just as I would with a nonfiction book or a New Yorker story. By learning from experts who had devoted their careers to studying exotic diseases, I let the story take a more natural course.
For people reading this during the current news cycle, the language surrounding influenza strains and vaccines isn’t as foreign as it might have once seemed. What was your research process like? What kind of access, if any, did you get to experts at the WHO and government agencies?
I was fortunate to talk to some of the great figures in medical science. Ian Lipkin, director of the Center for Infection and Immunity at Columbia University, was one of my first calls, and he allowed me into his lab and lent one of his assistants to teach me how viruses are sequenced. Philip Dormitzer, the chief scientific officer of viral vaccines at Pfizer, taught me about vaccine development. Dr. Barney Graham, a viral immunologist and vaccine expert at NIH in Bethesda, helped me solve some of the medical puzzles I set for myself in the novel. Jens Kuhn, at the NIH/NIAID/Integrated Research Facility at Fort Detrick, took me through his lab and instructed me on not only the science but also the moral quandaries researchers face in animal experimentation.
Because animals play a strong role in the novel, I also consulted with veterinary scientists, including Jamie Lee Barnabei at the National Veterinary Services Laboratories in Ames, Iowa; Sally Ann Iverson, a veterinary epidemiologist in Arizona; and Emily Lankau, a veterinary epidemiologist at the Ronin Institute. I feel embarrassed that I’ve slighted others who contributed their time and insight. These people are on the front lines of the struggle against COVID-19 right now.
Now that it’s not possible to ignore the elephant in the room any longer, when did you first take notice of COVID-19? When did you realize that it might balloon into not just an epidemic, but a global pandemic?
When the Chinese announced the presence of the virus, on New Year’s Eve, 2019, I immediately thought of SARS, which also started in China, in 2002. The fact that it was contained within 100 days was perhaps the greatest triumph of public health. Had it been the pandemic that COVID-19 is, the world would be facing a far more dangerous enemy.
So, near the end of January I had decided that it was time to order masks and gloves and start stocking up on canned goods. We planted lettuce. I wish I had sold more of my stocks.
Avoiding spoilers as much as possible, when news about the novel flu in the book reaches top ranks at the Department of Homeland Security, the young Health and Human Services lieutenant stresses to convey the severity of the situation, baffling her elders in the conference room.
A few months ago, readers might have been hard-pressed to be convinced as well, but the scenario she outlined—from total economic shutdowns to how long it takes to produce a successful vaccine—is exactly what is playing out in real life for us now. With that in mind, what has been your reaction to how the past few weeks have unfolded?
Dismay. If I can fault myself as a prophet, I would say that, in general, people have behaved better in real life than I gave them credit for, but governments have performed as expected, or worse.
Lawrence Wright, author of “The End of October.” Courtesy of Kenny Braun
While your previous books have been rooted in journalism, it needs to be reiterated that The End of October is a work of fiction. And while some of the aforementioned plot points (and others that will not be described here but saved for the reader) are startlingly similar to the coronavirus pandemic, the trajectory and severity of the actual disease are different.
But given the anxious climate right now, readers are undoubtedly going to be looking for some kind of answers, or even hope, by reaching the end of the book. What do you hope readers take away from this book, and quite frankly, are there any words of comfort you can impart to them?
I hope that readers will come away from the book with a better knowledge of the threat that viruses pose, but more than that, I want to convey my respect for the scientists who have devoted their careers—often at great personal danger—to understanding the cunning devices that nature presents us with in the form of disease.
This pandemic will leave a scar on history. The death toll hasn’t been totaled yet. The economy is still in a coma. It will be years before we truly assess the damage.
But moments like this offer the opportunity for a civilizational reset. Some of the great epidemics of the past, like the Plague of Athens, led to years of chaos and tumult. On the other hand, the Black Death, which killed a third of Europe in the 14th century, closed the door on the Middle Ages and led to the Renaissance. When societies are under great stress, they reveal their strengths and weaknesses. I think we all appreciate the need to respect science, demand a responsible and compassionate government, subdue partisanship, and put to rest the global antagonisms that have weakened democracy and keep us constantly on the threshold of needless conflict.
Recognizing those facts, of course, is not enough. We have to make the changes that will fortify our society. Whether we will do that is yet to be seen, but we certainly can if we determine that it must be done. In that case, this terrible disease will have given us a gift.
More must-read lifestyle coverage from Fortune:
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—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
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fortune--2020-04-28--The coronavirus will return year after year, top Chinese scientists warn

Q & A : Lawrence Wright on his new pandemic novel ‘ The End of October ’ and what we @ @ @ @

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Chinese scientists say the novel coronavirus will not be eradicated, adding to a growing consensus around the world that the pathogen will likely return in waves like the flu.
It’s unlikely the new virus will disappear the way its close cousin SARS did 17 years ago, as it infects some people without causing obvious symptoms like fever. This group of so-called asymptomatic carriers makes it hard to fully contain transmission as they can spread the virus undetected, a group of Chinese viral and medical researchers told reporters in Beijing at a briefing Monday.
With SARS, those infected became seriously ill. Once they were quarantined from others, the virus stopped spreading. In contrast, China is still finding dozens of asymptomatic cases of the coronavirus every day despite bringing its epidemic under control.
“This is very likely to be an epidemic that co-exists with humans for a long time, becomes seasonal and is sustained within human bodies,” said Jin Qi, director of the Institute of Pathogen Biology at China’s top medial research institute, the Chinese Academy of Medical Sciences.
A consensus is forming among top researchers and governments worldwide that the virus is unlikely to be eliminated, despite costly lockdowns that have brought much of the global economy to a halt. Some public health experts are calling for the virus to be allowed to spread in a controlled way through younger populations like India’s, while countries like Sweden have opted out of strict lockdowns.
Anthony Fauci, the director of U.S. National Institute of Allergy and Infectious Diseases, said last month that Covid-19, the disease caused by the virus, could become a seasonal ailment. He cited as evidence cases now showing up in countries across the southern hemisphere as they enter their winter seasons.
More than 3 million people have been sickened and over 210,000 killed in the global pandemic.
While some, including U.S. President Donald Trump, have expressed hope that the virus’s spread will slow as the temperature in northern hemisphere countries rises in the summer, Chinese experts on Monday said that they found no evidence for this.
“The virus is heat sensitive, but that’s when it’s exposed to 56 degrees Celsius for 30 minutes and the weather is never going to get that hot,” said Wang Guiqiang, head of the infectious diseases department of Peking University First Hospital. “So globally, even during the summer, the chance of cases going down significantly is small.”
—With assistance from John Liu and Yinan Zhao.
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Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.


fortune--2020-04-28--After Air France-KLM bailout, Germany’s Lufthansa could be next

Germany is preparing to take a stake in Deutsche Lufthansa AG as part of a multibillion-euro rescue package to help the carrier weather the coronavirus pandemic, according to people familiar with the matter.
A decision is expected in the coming days for an overall aid package that could amount to more than double the company’s market value of 4 billion euros ($4.3 billion), said one of the people, who asked not to be named because the talks are private. One option being discussed could include giving the government seats on the board and the power to block strategic decisions, a person said.
A spokesperson for Lufthansa declined to comment, while a government official said negotiations are ongoing.
On Tuesday, Business Insider reported Lufthansa is poised to get a 9 billion-euro rescue package from Germany that would give the government a stake in the struggling airline, seats on its supervisory board and influence to block strategic decisions. The carrier and the government aim to seal the deal during talks later Tuesday, it said, citing airline sources. The shares rose as much as 12%.
Haggling
German Chancellor Angela Merkel’s government has been haggling for weeks over the planned lifeline as Lufthansa loses 1 million euros an hour after travel restrictions decimated the global industry. Lufthansa Chief Executive Officer Carsten Spohr warned on Friday the carrier could face a liquidity crunch in a few weeks and would need state aid.
A bailout would follow an even bigger package for European rival Air France-KLM, which was unveiled Friday by French and Dutch finance ministers and came after weeks of talks between the airline, banks and the governments. France and the Netherlands pledged as much as 11 billion euros in loans and guarantees that the carrier had said were crucial to its survival. Lufthansa and Air France-KLM are the region’s two biggest carriers by passenger traffic and considered by the states as too important to fail.
German Economics Minister Peter Altmaier has favored a silent participation and a loan package to help Lufthansa through the crisis, but the Social Democrats, Germany’s junior coalition partner, has demanded far-reaching control over the day-to-day running of the company in return for a multibillion rescue package.
Political Control
While the Social Democrats seek a veto right with the stake and government representation on the supervisory board, Merkel’s party block wants to lower the active stake to below 25% to avoid making the German carrier too political. German government officials came close to hammering out an accord with Lufthansa on Monday, but discussions about the state taking a stake and the limiting of political control are still ongoing, one person said.
Companies like Lufthansa should “have the opportunity to get back on their own two feet and turn a profit,” Altmaier said on local radio Monday.
The company also operates so-called national flag carriers in Austria, Belgium and Switzerland, which could also be involved in the bailout. The willingness of France and Germany to shore up their ailing champions comes after the International Air Transport Association repeatedly warned the health crisis could bankrupt half the world’s airlines, with the hit to European carriers expected to reach $89 billion in lost sales.
In an ominous sign for airline employees in the region, Scandinavia’s main airline SAS AB is cutting as many as 5,000 jobs or about 40% of its workforce, becoming the first major European carrier to permanently slash staff numbers following the outbreak of the virus.
More must-read international coverage from Fortune:
—Boris Johnson won his personal battle against COVID-19. Now comes the hard part
—Coronavirus brought China’s travel industry to a standstill. Now it’s showing signs of life
—China’s movie theaters are closed—again. For studios, the anxiety is unbearable
—The Church of England is going up against ExxonMobil on climate change. Can it win?
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: The global crisis in recycling
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-28--A state-by-state rundown of stay-at-home orders and business re-openings

Restaurants opened up to dine-in patrons in at least three states Monday and the governor of Texas allowed movie theaters, malls and eateries to start letting customers trickle into their establishments later this week.
Across the country, an ever-changing patchwork of loosening stay-home orders and business restrictions took shape Monday.
Texas Gov. Greg Abbott outlined a slow reopening of one of the world’s largest economies amid the coronavirus pandemic. Restaurants in Tennessee, Georgia and Alaska’s biggest city began opening their doors to dine-in customers, with new rules such as temperature checks at the door and logging of customer information for possible contact tracing.
Construction workers are being allowed back on the job in Vermont and other states. Ohio Gov. Mike DeWine’s first steps toward reopening will require masks for workers and shoppers.
“No masks, no work, no service, no exception,” DeWine said.
Here’s a look at what’s happening in the individual states and their shutdown orders.
New moves
TEXAS: Abbott’s plan allows restaurants, retailers, movie theaters and malls to let in customers up to 25% of capacity as long as they follow social distancing guidelines. Abbott also said he will let his monthlong stay-at-home order expire on Thursday. Bars, barbershops, hair salons and gyms remain closed.
ALASKA: Republican Gov. Mike Dunleavy on Friday began allowing the limited reopening of restaurants, stores, hair and nail salons and other businesses. It wasn’t until Monday that the state’s main population center, Anchorage, allowed those businesses to open. The strict restaurant rules require reservations and only family members to share tables.
COLORADO: Democratic Gov. Jared Polis’ stay-at-home order expired Monday. A “Safer at Home” plan encourages continued telecommuting and allows non-essential retailers to offer drive-up and home delivery. On May 4, non-essential business offices can reopen with half the usual staff to allow for social distancing.
GEORGIA: Restaurants resumed dine-in service and movie theaters were allowed to reopen Monday under Republican Gov. Brian Kemp’s controversial reopening order. Gyms, hair and nail salons, bowling alleys and tattoo parlors opened Friday with restrictions.
OHIO: The much anticipated return to normalcy in Ohio will happen slowly, with the reopening of many health care offices on Friday. Retail stores will need to wait two weeks before they can open, the governor said Monday. He also imposed a strict mask requirement.
LOUISIANA: Gov. John Bel Edwards announced Monday he is extending Louisiana’s stay-at-home order through May 15, saying some regions of the state haven’t shown enough progress to lessen widespread restrictions on businesses and public gatherings. But if the state’s rate of infections continues to decrease, the Democratic governor said he expects he will begin to loosen constraints on May 16, with churches and more retailers allowed to open statewide at that time, including hair and nail salons and some restaurant dine-in services.
RHODE ISLAND: Gov. Gina Raimondo said Monday her goal is still to lift the state’s stay-at-home order on May 8 and the next day start a “slow and methodical and careful” economic recovery from the coronavirus pandemic.
FLORIDA: Republican Gov. Ron DeSantis has asked his state coronavirus task force for recommendations for the first phase of reopening. He says the state should look at risk factors as it starts to reopen for business, and not just what’s essential. Over the past couple of weeks, many municipalities have reopened beaches and parks to allow recreation under social distancing rules — a key exemption to a state safer-at-home order running through Thursday.
MONTANA: Churches resumed Sunday services and retailers closed for a month cautiously reopened Monday with social distancing and disinfecting guidelines under a plan announced earlier by Democratic Gov. Steve Bullock. Schools have the option to return to in-classroom instruction May 7, but several districts decided to end the academic year with remote instruction.
OKLAHOMA: Republican Gov. Kevin Stitt allowed non-elective surgeries to resume and hair and nail salons, barbershops, spas and pet groomers to reopen last Friday, by appointment only and if they adhere to social distancing and strict sanitation. Restaurant dining rooms, movie theaters, gyms and places of worship can open starting this coming Friday as long as businesses follow social distancing and sanitation protocols.
SOUTH CAROLINA: Republican Gov. Henry McMaster has begun to gradually allow more businesses to reopen. On Tuesday, nonessential businesses such as flea markets, department stores and boutiques could reopen and local governments were allowed to remove barricades to beaches. McMaster said the timing for additional steps depends on reports from state health officials.
TENNESSEE: Many restaurants were allowed dine-in service again Monday as part of Republican Gov. Bill Lee’s directive to begin reopening the economy. The plan comes just a day after the state reported its biggest one-day jump in confirmed coronavirus cases. One restaurant was checking the temperature of customers at the door.
UTAH: Restaurants could begin reopening to dine-in customers Friday in parts of Utah, with social distancing measures in place. Republican Gov. Gary Herbert has already allowed elective surgeries to resume and reopened state parks to all residents in one of the few states with a voluntary statewide shelter-in-place order.
VERMONT: Republican Gov. Phil Scott has taken steps toward loosening restrictions on nonessential businesses. Still, many of the altered provisions remain strict, including five construction workers per job site on the condition that they stay 6 feet apart.
More gradual
ALABAMA: Republican Gov. Kay Ivey has said she is eager to reopen but urged people to continue following the order. The order, in place through April, disallows dine-in restaurant service and closes nonessential businesses such as salons and entertainment venues.
ARIZONA: Republican Gov. Doug Ducey will allow hospitals to resume elective surgeries Friday, but is waiting for more data on the virus before he decides whether to extend his current stay-at-home order when it expires Thursday.
ARKANSAS: Republican Gov. Asa Hutchinson’s ban on elective surgeries was eased starting Monday. Hutchinson has said he hopes to begin lifting some other restrictions May 4. Arkansas does not have a broad stay-at-home order but has imposed other rules.
HAWAII: Democratic Gov. David Ige’s stay-home order is in effect until Wednesday and could be extended, but Honolulu Mayor Kirk Caldwell has extended the stay-at-home order for the state’s largest city through May 31. Caldwell announced some initial steps to ease rules starting with allowing people to walk and jog in city parks beginning Saturday, April 25.
IDAHO: Republican Gov. Brad Little’s stay-home order restricting nonessential businesses expires Thursday. Last week, he allowed more businesses to reopen if they could offer curbside service and ensure social distancing.
INDIANA: Republican Gov. Eric Holcomb lifted elective medical procedures beginning Monday, and the statewide stay-at-home order is in effect until Friday. Holcomb has said he may announce steps relaxing restrictions on some businesses and major changes will be made in collaboration with neighboring states.
KANSAS: Democratic Gov. Laura Kelly supports a phased economic reopening following widespread testing and contact testing. She’s under increasing pressure from the Republican-controlled Legislature to outline such a plan and the Kansas Chamber of Commerce to start reopening the economy.
KENTUCKY: Democratic Gov. Andy Beshear has announced plans to ramp up coronavirus testing with new sites in Louisville and Lexington, the state’s two largest cities, along with Owensboro and Bowling Green. The Democratic governor also announced an initial phase of resuming hospital services such as diagnostic and radiology procedures.
MICHIGAN: Democratic Gov. Gretchen Whitmer has said she will extend the state’s stay-at-home order when it expires Thursday, but also hopes to relax some restrictions that to start reopening some sectors of the economy. Some has hinted that the elderly and people with chronic lung problems may face restrictions longer than others.
MISSISSIPPI: Republican Gov. Tate Reeves favors gradual reopening, but has not set a timeline. He has allowed some nonessential businesses like florists and clothing stores to start delivery or curbside pickup. The statewide state-at-home order has ended, replaced with an order for just medically vulnerable people to stay home.
MISSOURI: Republican Gov. Mike Parson said Monday all Missouri businesses and social events will be allowed to reopen next week as long as residents and business owners continue to practice proper social distancing requirements. He said as of next Monday, residents will be able to return to all businesses, such as restaurants, manufacturing plants, gyms and hair salons, along with churches, sporting events and social gatherings. Parson said local governments can impose stricter limitations if their officials believe it is necessary. Kansas City’s stay-at-home order is scheduled to continue through May 15. St. Louis, which has had a majority of the state’s cases, has not yet said when it will lift its order.
NEW HAMPSHIRE: Republican Gov. Chris Sununu has appointed a bipartisan group of lawmakers, business leaders and state officials to examine how the state can begin to re-open its economy. The state’s stay-at-home order expires May 4, but Sununu said there likely will be further extensions.
NORTH CAROLINA: Democratic Gov. Roy Cooper has extended a statewide stay-at-home order until May 8 and closed schools for the rest of the semester. He has released details on testing, contract tracing and case rate goals that must be met before easing business and movement restrictions. His three-phase proposal could not be fully achieved until mid-June at the earliest.
OREGON: Democratic Gov. Kate Brown has circulated Oregon’s own version of a three-phase plan to lift restrictions amid the coronavirus pandemic, including allowing childcare facilities to reopen in phase one and possibly restaurants. But Oregon’s plan contains no time frame for reopening certain areas of the economy, and Brown has listed no specific end date for her social-distancing directives.
PENNSYLVANIA: Democratic Gov. Tom Wolf has shut schools for the academic year and shuttered tens of thousands of businesses. But he is allowing construction statewide to resume on Friday, and a week later plans to lift his stay-at-home order and ease other restrictions in the least-impacted parts of the state. Wolf says the shutdown can be loosened once the number of new cases falls below one new infection for every 2,000 people over a two-week period.
WASHINGTON: Democratic Gov. Jay Inslee has said easing the stay-at-home home order in effect through May 4 will be gradual with decisions based on markers including adequate testing and the pace of new cases. But there are mounting calls for easing restrictions in the state that had the first major deadly outbreak, including a sheriff who says he won’t enforce the stay-home order because it violates constitutional rights.
WEST VIRGINIA: Republican Gov. Jim Justice announced Monday that as long as the state’s positive test rate stays below 3% for three consecutive days, he’s allowing hospital elective procedures, outpatient health care, primary care, dentistry, and psychological and mental health services. Next week would involve the reopening of small businesses, outdoor seating at restaurants, barber shops, nail salons, and church and funeral services. In subsequent weeks, offices, hotels, casinos, restaurants and other remaining businesses could reopen.
No stay-at-home order
IOWA: Republican Gov. Kim Reynolds said Monday she would partially reopen businesses and churches in 77 of Iowa’s 99 counties, even as the state experiences increased numbers of coronavirus-related cases and deaths. Reynolds said restaurants, fitness centers, retail stores and malls could reopen Friday at 50 percent of their operating capacity in those mostly rural countries. Reynolds will allow church services to resume. Tougher restrictions remain for counties with Iowa’s largest cities, including Des Moines and Cedar Rapids.
NEBRASKA: Republican Gov. Pete Ricketts didn’t impose a stay-at-home order but required schools to close and imposed a 10-person limit on gatherings, including at businesses. Ricketts last week announced he will relax coronavirus restrictions in 59 of Nebraska’s 93 counties, including the Omaha area, and will allow in-person church services to resume with some limitations. The changes go into effect May 4 and will allow restaurants in the affected counties to reopen their dining rooms but require them to keep crowds at or below half of their rated occupancy.
NORTH DAKOTA: Republican Gov. Doug Burgum ordered most businesses closed until at least Thursday and hasn’t signaled when he would lift the restrictions. Burgum last week said the state plans to increase testing and contact tracing to protect residents and meet White House guidelines to put people back to work.
SOUTH DAKOTA: Gov. Kristi Noem, a Republican, has resisted calls to shut down businesses or issue a stay-at-home order, even amid criticism after an outbreak infected hundreds of workers at a Sioux Falls pork plant that had to be shuttered. Noem has instead called on gatherings to be limited to 10 or fewer people and on businesses and individuals to practice safe distancing.
WYOMING: Wyoming is among a handful of states that never implemented a statewide stay-at-home order. Testing capacity for the coronavirus remains limited but Republican Gov. Mark Gordon considers the state already essentially in Phase One of the White House reopening guidelines. Gordon has ordered schools and many types of businesses to remain closed until Thursday.
Not anytime soon
CALIFORNIA: Democratic Gov. Gavin Newsom last week allowed hospitals to resume scheduled surgeries in the first significant change to the stay-at-home order in the nation’s most populous state. But Newsom said the state’s broader stay-at-home order won’t be lifted until the state can dramatically increase its testing capacity. Newsom said Monday that California may be just weeks away from “meaningful changes” to its stay-at-home order, but warned progress will be jeopardized if people crowd beaches as they did in some places over the warm spring weekend. Some rural counties are seeking to ease restrictions and some in the San Francisco Bay Area are extending them through the end of May.
CONNECTICUT: Democratic Gov. Ned Lamont has said he’ll start thinking about reopening Connecticut’s economy on May 20, when when his order shutting down schools and nonessential businesses is due to expire. But he says before that happens they must be 14 days of declining hospitalizations, much greater testing capability and more masks and other personal protective equipment for workers who interact with the public.
DELAWARE: Democratic Gov. John Carney has indicated state officials will develop a plan for reopening Delaware’s economy based on guidance from the CDC, including 14 days of declining cases. Carney also says extensive testing and contract tracking programs must be in place before economic restrictions are loosened.
ILLINOIS: Democratic Gov. J.B. Pritzker last week extended his stay-at-home order, which also closed all nonessential businesses, to May 30. Beginning Friday, face coverings must be worn in public when 6-foot distancing is not possible. Also, surgeries that were delayed may now be rescheduled, retail stores not on the essential-business list can start providing pickup and delivery service and state parks will reopen for activities such as hiking and fishing. Schools remain closed through the semester with remote learning.
MARYLAND: Republican Gov. Larry Hogan has called for a gradual reopening of the state that will be guided by the rate of hospitalizations due to the virus and number of patients admitted to intensive care. Still in effect is the state-at-home order, which would be lifted under the state’s first phase of the reopening process. It would also enable some small shops and certain small businesses to resume service.
MASSACHUSETTS: Republican Gov. Charlie Baker has said it’s too early to begin reopening the state’s economy. Baker says new hospitalizations is a key data point, and a modest increase continues statewide. The governor says the question will be less what businesses are essential or nonessential and more about what are the rules everyone will need to follow.
MINNESOTA: The state’s stay-at-home order runs through May 4, and it’s not clear when Democratic Gov. Tim Walz will announce whether it will be extended. Walz gave the green light for people who work at some 20,000 industrial, manufacturing and office settings that don’t face the public to begin returning to work Monday.
NEVADA: Nevada joined a western regional pact Monday to help fight the virus outbreak while moving closer to reopening businesses and modifying stay-at-home orders. Democratic Gov. Steve Sisolak has not given a date for easing restrictions. He said the Western States Pact including Colorado, California, Oregon and Washington has a shared vision that puts science ahead of politics. Sisolak said millions of people from the U.S. West visit Nevada every year so the partnership will be vital to the state’s immediate recovery and long-term economic comeback.
NEW MEXICO: Democratic Gov. Michelle Lujan Grisham has said the state is likely to extend major social distancing and business restrictions through May 15 as it convenes mayors and business leaders to help with economic recovery plans. The state has no deadline or date for starting its first phase of reopening the economy.
NEW JERSEY: Democratic Gov. Phil Murphy Monday unveiled a plan setting the stage for reopening the state’s economy. The governor said any lifting of restrictions will require two weeks’ worth of a drop in positive cases, expanded testing, increased contact tracing, and safe places for positive people to isolate.
NEW YORK: At the epicenter of the outbreak in the U.S., Democratic Gov. Andrew Cuomo says he has enlisted former New York City Mayor Mike Bloomberg to help create a “tracing army” to find people infected with the coronavirus and get them into isolation. New York will work on the massive effort with neighboring New Jersey and Connecticut.
VIRGINIA: Democratic Gov. Ralph Northam has said state’s stay-at-home order in effect through June 10 could be changed and has not outlined a specific timeline for reopening businesses. Northam has said he generally agrees with federal guidelines recommending a phased-in approach starting after 14 days of declining cases.
WISCONSIN: The health secretary for Democratic Gov. Tony Evers has extended the state’s stay-at-home order closing most nonessential businesses until May 26. It originally was to end April 24 and Republican legislative leaders on April 21 asked the state Supreme Court to block the order, calling it constitutional overreach. Evers Monday loosened an earlier stay-at-home order to allow reopening of all nonessential businesses that can offer curbside service, like dog groomers and lawnmower repair shops. He previously allowed golf courses to open and permitted libraries to offer curbside book pickup.
MAINE: Democratic Gov. Janet Mills has said her administration is planning a phased reopening but the timing remains uncertain because of a lack of adequate testing.
More coronavirus coverage from Fortune:
—What the law says about forcing employees back to the office
—Coronavirus turns the outdoor industry’s crucial spring into the most challenging in years
—5 lessons for the coronavirus recovery, from an expert on success and failure in crisis
—What to know if your small business is applying for Round 2 PPP loans from the SBA
—There may be 22 hidden coronavirus hotspots in states poised to lift restrictions
—Coronavirus brought China’s travel industry to a standstill. Now it’s showing signs of life
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—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
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fortune--2020-04-28--Danone sees the pandemic accelerating the stakeholder capitalism shift

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
I’ve made several references in this newsletter to CEOs who find most of their employees working from home. Yesterday, I spoke with Emmanuel Faber, Chairman and CEO of Danone, who has 2/3rds of his 100,000 employees around the world still at work–operating factories, collecting milk, distributing product, etc. The company has instituted some pretty extreme distancing protocols at its factories, as well as temperature checks, and premium pay for those on duty. (You can read more in this Financial Times story.)
Danone has enjoyed a spot on Fortune’s Change the World list for its focus on social benefits, and is working to convert the entire company to B-Corp status over the next decade. Faber said the crisis will accelerate the company’s move toward B-Corp status, and probably push other companies in the same direction. His take:
“Everything we have seen during the last several months suggests companies will have even more stakeholders than they felt before, with government stepping in, health authorities stepping in, and so on. Whether you want to call them stakeholders or not, they are.
“This idea of stakeholder capitalism is going to be significantly bigger than it was before the crisis, whether you like it or not.”
More news below. And be sure to listen to this week’s edition of Leadership Next, which you can access here. My cohost Ellen McGirt talks with two entrepreneurs who have turned their considerable skills to solving problems of the pandemic: K.R. Sridhar of Bloom Energy and Jane Mosbacher Morris of To The Market.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Oil prices
U.S. oil prices continue to slide on concerns over storage capacity. The WTI contract for June had fallen over 20% to $10.16/barrel at one point this morning, following a 25% drop yesterday. Westpac head of market strategy Robert Rennie: "We are approaching [the limit of] physical storage capacity around the world…[and] the point where floating capacity is also approaching its structural limits as well—and that has a depressing effect." Financial Times
HSBC loans
HSBC has set aside $3 billion to cover bad loans. The bank's Q1 profits nearly halved due to a range of factors including declining customer activity, weakening oil prices and "a significant charge related to a corporate exposure in Singapore" (it did not name the firm, but it may be oil trader Hin Leong Trading, to which HSBC is heavily exposed). Reuters
Coronavirus waves
Chinese scientists predict the novel coronavirus will come back each year, flu-style, as asymptomatic carriers make it difficult to fully contain its spread. This is becoming the international scientific consensus. Also, Chinese experts warn there is no evidence that summer will slow the virus's spread—they say it's heat-sensitive when exposed to 56 degrees Celsius (133 Fahrenheit) for prolonged periods of time. If summers get that hot, well, we have other problems. Bloomberg
Plane masks
JetBlue has become the first U.S. airline to require its passengers to wear face coverings during travel and check-in. JetBlue COO Joanna Geraghty: "This is the new flying etiquette…Onboard, cabin air is well circulated and cleaned through filters every few minutes but this is a shared space where we have to be considerate of others." And while we're on the subject, check out the new PPE uniforms that AirAsia flight crew will have to wear—that can't be fun over extended periods of time. Fortune
AROUND THE WATER COOLER
Right to WFH
Working from home could become a right for many in Germany, if Labor Minister Hubertus Heil gets his way. Heil: "Anyone who wants to, and whose workplace allows it, should be able to work from home—even when the corona pandemic is over. You can either switch to working from home entirely, or you can decide to do so once or twice per week…We want to enable more working from home—but not to force them to do so." Deutsche Welle
About force…
And what if American employers do want to force their employees back to work? Fortune's Jeff John Roberts has an informative piece on that, which notes: "According to legal experts, employees don’t have a blanket right to refuse to work during the pandemic, but that doesn’t mean they can’t demand protection from obvious risks. Meanwhile, lawyers are advising business owners to think carefully about worker safety as they navigate a situation fraught with legal implications." Fortune
Wine lakes
Winegrowers are begging the European Commission to fund the emergency distillation of over a billion bottles of wine into industrial ethanol. Consumer demand for wine is down because of restaurant closures, and their cellars can't store all the wine that's being produced—all quite reminiscent of the current oil crisis. Politico
Investment prospects Executive editor Adam Lashinsky be chatting over Zoom with longtime tech analyst Gene Munster about how he sees the investing environment playing out. The call is live on Wednesday, April 29, at 10:00 Pacific/1:00 Eastern. They'll take your questions via chat. (This call will be audio only: You have permission to multi-task.) Register here for free.
This edition of CEO Daily was edited by David Meyer.


fortune--2020-04-28--How CEOs outside of the health care industry decided to get it on the fight against coronavirus

During World War II, American industry mobilized to support the military. Now, in the midst of the coronavirus pandemic, American industry is stepping up to support the battle against COVID-19. Companies both large and small have shifted gears to produce needed supplies, fill gaps in the supply chain, and offer their expertise to bolster public health efforts.
In this week’s episode of “Leadership Next,” Fortune CEO Alan Murray’s podcast on the changing rules of business leadership, Murray and senior editor Ellen McGirt interview two chief executives on how their companies are adjusting in an effort to beat the coronavirus. KR Sridhar, CEO of Bloom Energy, and Jane Mosbacher Morris, founder and CEO of To the Market, discussed their businesses’ approach to this crisis.
“Even though these are terrible times, I can’t help but feel we are in the middle of a global master class in crisis innovation,” McGirt said. “People are conjuring up new solutions to help the world with the capabilities they already have.”
Bloom Energy, a clean-energy company based in San Jose, is what Sridhar calls “a mission driven company,” making it a no-brainer to deploy some of its employees to tackle pain points caused by the coronavirus crisis. Namely, Bloom employees are working to refurbish ventilators that have been stockpiled in state supplies.
The company is classified as an essential service, so as it continues to manufacture fuel cells, employees are taking on this ventilator work as an addition. At the time of this interview, Bloom had refurbished 1,200 ventilators, but it is capable of refurbishing around 2,000 per week in its East and West Coast facilities.
“The good news is we don’t need it right now because we are flattening the curve,” Sridhar said.
Around the nine-minute mark, Sridhar explains that refurbishing the ventilators wasn’t enough for the Bloom team. They wanted to improve the design of ventilators. Bloom employees worked with Stanford Medical School to create a device that allows one ventilator to be shared among multiple patients. The invention is now waiting for emergency authorization from the Food and Drug Administration.
When asked what all of this work is costing the company, the Bloom CEO said he’s not in the ventilator business and doesn’t care to be, so he is not prioritizing profit.
“If we cannot be there for people at a time of need like this, why would we want to be here?” he asked.
Mosbacher Morris agrees with Sridhar’s sentiment, telling McGirt that her company got involved in coordinating the production of much-needed personal protective equipment (PPE) “because we thought it was the right thing to do.”
To the Market is a company that works to disrupt the traditional supply chain, elevating women-owned, sustainable makers rather than factories with “challenging social and environmental footprints.” It works with hundreds of makers from over 20 countries to “power an ethical supply chain.”
Usually, the company focuses on apparel, accessories, and home goods, but in the face of COVID-19, To the Market pivoted to PPE to fill the shortages hospitals are experiencing globally.
The company has received orders for over 2 million units of PPE, and at the time of the interview, it had fulfilled 1.1 million of those.
“I thought we almost had an obligation to try because we have this expertise and because we have a syndicated supply chain,” Mosbacher Morris said. “It felt like a tremendous opportunity for us to add value, and I felt like our team was equipped and ready to do it.”
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More coronavirus coverage from Fortune:
—Bill Gates explains how to beat the coronavirus pandemic
—The U.S. is learning why limiting hospital beds carries a steep cost
—Instacart to hire 250,000 more workers amid soaring demand
—What to know if your small business is applying for Round 2 PPP loans from the SBA
—14% of women considered quitting their jobs because of the coronavirus pandemic
—The 3-pronged approach to defeating the coronavirus
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—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-28--Stocks climb, oil sinks: Why plunging crude prices are spooking traders again

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning, Bull Sheeters. Stocks are trading higher, which is pretty impressive considering the volatility in the oil markets and a fresh wave of weak corporate results.
Let’s check in on what’s happening around the world.
Markets update
Asia
The major indices are mixed, with Hong Kong up and Tokyo and Shanghai down.
up and and down. In Asia trade, the price of Brent and WTI plunged again, extending yesterday’s losses.
and plunged again, extending yesterday’s losses. South Korea, one of the world’s biggest storage markets for crude, is telling producers we can’t take on any more barrels. The state-run Korea National Oil Corp. said it’s run out of the storage space it usually leases to third parties.
Europe
European bourses are all trading in the green after a sluggish start. Germany’s DAX led the way higher , up nearly 0.7% in mid-morning trade.
bourses are all trading in the green after a sluggish start. led the way higher up nearly in mid-morning trade. To earnings now… Oil giant BP announced a big profit hit. HSBC and Spain’s Santander , meanwhile, warned that non-performing loans and bad credit were quickly marring their books. Novartis though bucked the trend. The drugmaker kept intact its full-year revenues and profit forecast. Don’t hold your breath waiting for a COVID-19 vaccine, CEO Vas Narasimhan told Bloomberg TV in an interview.
announced a big profit hit. and Spain’s , meanwhile, warned that non-performing loans and bad credit were quickly marring their books. though bucked the trend. The drugmaker kept intact its full-year revenues and profit forecast. Don’t hold your breath waiting for a COVID-19 vaccine, Vas Narasimhan told Bloomberg TV in an interview. We get euro area Q1 GDP numbers on Thursday, and it’s looking bad. The first quarter is shaping up to be the first contraction since 2013 . The current quarter looks even worse.
numbers on Thursday, and it’s looking bad. The first quarter is shaping up to be the . The current quarter looks even worse. Now for some good news: Italy and Germany reported yesterday multi-week lows in the number of new coronavirus infections.
U.S.
The Dow , S&P 500 and Nasdaq futures all look to open higher, extending yesterday’s gains. All three began the week in strong fashion, notching gains of between 1.1%-1.5% yesterday.
, and futures all look to open higher, extending yesterday’s gains. All three began the week in strong fashion, notching gains of between yesterday. Round 2 of the Paycheck Protection Program (PPP) got underway yesterday. Demand for the small-business loans is brisk, and the online portal is having difficulty holding up.
of the (PPP) got underway yesterday. Demand for the small-business loans is brisk, and the online portal is having difficulty holding up. Reminder: it’s a big week for company earnings. All eyes will be on Alphabet today, which reports after the close today.
Elsewhere
Gold and the dollar are down as U.S. equities futures climb.
and the are down as U.S. equities futures climb. Crude is tanking again today. WTI futures fell below $10.50/barrel at one point on Tuesday. The U.S. benchmark is down more than 30% over the past two trading sessions. The contagion is rocking Brent too. The global benchmark is down more than 5% to below $20 per barrel.
The week ahead
Could crude go subzero again? That’s becoming a distinct possibility as WTI falls by more than 15% for a second straight day. The lockdowns have decimated demand. Storage is scarce. Throw in a major oil ETF dumping futures contracts, and you have all the makings of another market collapse. It seems nobody wants to get caught holding contracts for WTI specifying delivery over the next two to three months. June and July futures contracts were both under 20 bucks, and falling this morning.
This is a global issue. IEA forecasts that oil demand will fall by a record 12 million barrels per day in May, and that’s creating a wide gulf in the industry: those who have storage and those who don’t. “We’re fortunate in that we can find a physical home for crude,” Bernard Looney, BP CEO, told Bloomberg TV this morning. “Not everyone is so fortunate.”
Among the most precarious are U.S. oil producers. Storage space is quickly nearing capacity, whether it be at the main hub in Cushing, Okla., or at other commercial locations. In fact, unless demand rapidly comes back online, capacity for U.S. crude storage could max out by as early as September, as today’s chart shows.
This chart and data comes courtesy of CFRA, an independent investor research firm, that sent me their oil report yesterday. They project that Cushing will run out of storage space by the end of May, a development that could spook the markets further as it has the capacity to hold a whopping 76 million barrels. Once Cushing is no longer available, we’re looking at no more than three to four more months before commercial U.S. storage (should current output and demand rates persist) reaches its limits. Yes, the U.S. government could step in and buy crude to fill the strategic petroleum reserve, but that too is close to the brim—already 89% full, CFRA says.
“The situation is like a very elaborate game of hide-and-seek…except everyone is trying to hide, not seek,” the CFRA report authors says.
BP’s Looney didn’t seem all that perturbed by the situation this morning on TV. He said the company is still doubling down on its commitment to transition to more renewables. “The pandemic only adds to the challenge for oil,” he said, before noting that people are seeing more clearly a new future, one with, “blues skies and clean air.”
It looks true from where I sit. It’s remarkable how clear the skies have been above Rome lately.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
Just what 2020 needed: pirates. There’s been a big spike in piracy in Q1 because, you know, pandemics aren’t frightening enough. That’s according to International Maritime Bureau, which says the first three months of 2020 saw 47 pirate attacks compared to 38 in Q1 2019. Most of the activity can be found in the Gulf of Guinea in West Africa, busy waters for oil-exporting countries. Never mind that global oil prices are tanking, and that global trade has ground to a halt. Piracy is expected to soar this year and next, CNBC reports.
Dunking on Uncle Sam. Playing “small ball” might be en vogue in the NBA, but the Los Angeles Lakers may have taken things too far, writes Fortune’s Rey Mashayekhi. The Lakers, one of the richest franchises in professional sports, had scored one of those elusive PPP loans meant for small businesses. Alas, it announced Monday it’s returned the money, all $4.6 million of it.
Square pegged. Digital payment company Square is one of those bellwether stocks that reveals a whole lot about the health of America’s Main Street. And things aren’t looking too good. When Square reports its quarterly results next week it’s expected to detail to investors a big drop in revenues, of about 61%. “It can withstand a downturn,” BTIG analyst Mark Palmer tells Fortune. “With that said, we are anticipating that the company is going to see a very steep drop.”
Market candy
340 billion
In 2009, at the depths of the global financial crisis, the sheer amount of U.S. corporate junk—defined as “selective default” grade, a key measure of corporate credit worthiness— hit record levels of nearly $340 billion. We may exceed that dubious level in the coming months, analysts say. “Even in a less grim scenario, the figure could approach levels reached after the dot-com bust in the early 2000s,” The Wall Street Journal reports.
One more thing. We've got another webinar/q&a this week: Fortune executive editor Adam Lashinsky will chat tomorrow with tech analyst Gene Munster of Loup Ventures about how he sees the investing environment playing out in these crazy times.
Date and time: Wednesday, April 29, at 10:00 Pacific/1:00 Eastern. 30 minutes duration.
registration link: https://us02web.zoom.us/webinar/register/WN_09HTHFKxT-yqQPjrjkGvAg


fortune--2020-04-28--‘This is the new flying etiquette:’ JetBlue is first U.S. airline to require passenger face masks

JetBlue Airways Corp. will require customers to wear face coverings during travel, a first for U.S. carriers in the age of the coronavirus pandemic.
Under the new policy starting May 4, passengers will have to cover their nose and mouth throughout their trip, JetBlue said in a statement Monday. That includes when they check in, board the plane, fly and exit the aircraft. The New York-based carrier is also asking customers to follow the same rule in airport terminals.
“This is the new flying etiquette,” JetBlue Chief Operating Officer Joanna Geraghty said in the statement. “Onboard, cabin air is well circulated and cleaned through filters every few minutes but this is a shared space where we have to be considerate of others.”
The new requirements signal a major potential shift in commercial flying as airlines look to coax people back onto planes and soothe concerns that aircraft cabins will foster the spread of Covid-19. JetBlue said the policy is based on guidelines from the U.S. Centers for Disease Control “that indicate all individuals should wear a face covering in public to help slow the spread of the coronavirus.”
United Airlines Holdings Inc., Delta Air Lines Inc. and American Airlines Group Inc. already require some employees to wear face masks or will do soon. American will start providing face masks and wipes next month to customers who want to use them.
Small children are exempt from the face-covering rule on JetBlue flights.
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—What the law says about forcing employees back to the office
—Coronavirus turns the outdoor industry’s crucial spring into the most challenging in years
—5 lessons for the coronavirus recovery, from an expert on success and failure in crisis
—What to know if your small business is applying for Round 2 PPP loans from the SBA
—There may be 22 hidden coronavirus hotspots in states poised to lift restrictions
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Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-28--Alaska Girl Scouts received PPP loan for lost cookie sales

Selling Girl Scout cookies is normally a foolproof business model, but the coronavirus outbreak cooled sales of for Alaska scourts.
The Girl Scouts of Alaska looked for help and the group is expected to receive a federal recovery loan to help compensate for lost cookie sales.
First National Bank Alaska facilitated the federal Paycheck Protection Program loan, The Anchorage Daily News reported Sunday.
Leslie Ridle, head of one of Alaska’s two Girl Scouts councils, said fears of girls becoming infected with COVID-19 forced the organization to cut its six-week sales season in half.
Cookie sales fund nearly everything the council does, including camps and scholarships for 3,500 girls and wages for 20 full-time employees.
“It was frenzied shopping, and people were hoarding cookies like they were toilet paper,” Ridle said of sales before the state ordered business closures last month.
Now her Anchorage-based council is sitting on about 144,000 unsold boxes filling the homes of scouting families in southern Alaska, Ridle said.
“I’m hearing from lots of families: ‘When am I getting these out of my living rooms?’ ” Ridle said.
A First National Bank Alaska loan officer called at night and on weekends, including Easter Sunday, to gather information to obtain the loan, which arrived in the council’s bank account last week, Ridle said.
The funding allowed employees to continue working and provide online programs for Girl Scouts stuck at home, like magic trick lessons and flamenco dancing. A new COVID-19 badge emphasizes good hygiene.
“It’s our bridge to keep things going,” Ridle said.
Companies including ConocoPhillips Co., GCI LLC and First National Bank Alaska have also made big cookie purchases to help the Girl Scouts.
People whose lives have been altered by the pandemic still want the cookies, the “ultimate comfort food,” Ridle said.
For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, and death. The vast majority of people recover.
More coronavirus coverage from Fortune:
—What the law says about forcing employees back to the office
—Coronavirus turns the outdoor industry’s crucial spring into the most challenging in years
—5 lessons for the coronavirus recovery, from an expert on success and failure in crisis
—What to know if your small business is applying for Round 2 PPP loans from the SBA
—There may be 22 hidden coronavirus hotspots in states poised to lift restrictions
—Coronavirus brought China’s travel industry to a standstill. Now it’s showing signs of life
—Work from home tips from the executive team that brought you Zoom
—PODCAST: COVID-19 might have upended the concept of the best companies of the year
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.


fortune--2020-04-28--Alphabet’s shares jump 8% after the coronavirus impact is less than feared

Boneless chicken is first to go scarce as coronavirus hits U.S. meat supply

Google’s multibillion-dollar ad machine is slowing as the coronavirus pandemic continues to take a financial toll. And the worst is yet to come.
Alphabet, Google’s parent, reported $41.2 billion in revenue, up 13% from the same quarter last year and beating analysts’ expectations of $40.3 billion. While the news is better than expected, revenue is still slowing compared to the same quarter last year when it increased 17%.
Profits increased 3% year over year.
But a bigger hit to Alphabet’s business is expected to come in the current quarter, when the effects of the coronavirus is expected to be much more apparent. Alphabet’s chief financial officer, Ruth Porat, said the company’s ads business was growing in January and February, but following the government shutdowns in March, ads sales experienced an “abrupt drop.”
“The second quarter will be a difficult one for our ad business.” Porat said without elaborating.
The company said the big indicators of a move to normalcy will be how quickly people return to spending money, in general, which correlates with companies buying more ads. Porat also said there are “very early signs of recovery in commercial search behavior,” but she was unable to say what that impact may be. She also said it was “premature” to comment about how long any recovery would take.
Alphabet’s stock rose nearly 8% following the earnings announcement, to $1,232.59 per share.
“They beat the low end of expectations and also performed better than feared from an investor standpoint,” said Jason Helfstein, an analyst at investment banking firm Oppenheimer.
Alphabet’s slowdown comes as advertisers, particularly airlines and hotels, slash their marketing budgets as the coronavirus cuts into their businesses. The tech giant is the top revenue generating company for digital ads, taking nearly 32% in market share in 2019. But the virus has quickly put a halt on digital ad spending, which is directly impacting advertising bellwethers like Alphabet.
Last week, CEO Sundar Pichai sent a note to employees saying that Google would slow hiring for the rest of the year. During the earnings call, Pichai said he would continue to hire in “strategic areas.” Google has already hired more than 4,000 people since the fourth quarter, ending the first quarter with 123,000 employees.
Alphabet also mentioned that it planned to slow some investments including in data centers and office space, which investors will applaud, said Dave Heger, an analyst at Edward Jones.
Michael Levine, an analyst at investment research firm Pivotal Research Group, agrees.
“It just feels like they’re’ looking at stuff with a different degree of discipline than the prior regime,” he said. “The cost discipline is very encouraging.”
Alphabet also reported increases in revenue in its cloud data center division and YouTube ads, though it’s difficult to compare whether that business has slowed or grown compared to previous years. The company only began disclosing YouTube results in the fourth quarter of last year. In the first quarter, YouTube ads generated $4 billion in revenue, up 33% from the fourth quarter. Meanwhile, cloud division sales soared 52% from the previous quarter, raking in $2.8 billion in revenue.
Alphabet also saw increased use of several of its products. Those include search, which many people have turned to for coronavirus-related information; YouTube, which is attracting millions of views for live streams; and Google Classroom, a web service for educators that has doubled in use since the beginning of March. Google is also seeing a rise in sales of its Chromebooks laptops and the use of its video conferencing service Meet, which is now adding nearly 3 million new users daily.
“We’re taking a long view and continuing to invest in long-term priorities but are being thoughtful in the short-term,” Pichai said.
More must-read tech coverage from Fortune:
—Who is new AT&T CEO John Stankey?
—Work from home tips from the executive team that brought you Zoom
—Is A.I. better at diagnosing illnesses than doctors? Don’t believe all the hype
—Facebook debuts Zoom-like video chat feature called Messenger Rooms
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-28--Key Uber executive steps down as company reportedly considers layoffs

Uber chief technology officer Thuan Pham is stepping down after seven years as an executive at the company. Uber has been hit hard by the coronavirus’s impact on the travel industry, as global transportation has ground to a virtual standstill.
The company may also be mulling job cuts of as much as 20%, according to tech news site the Information, which also reported on Pham’s departure earlier on Tuesday. Uber had about 27,000 employees at the end of last year.
An Uber spokesman declined to comment on the possible job cuts. “As you would expect, the company is looking at every possible scenario to ensure we get to the other side of this crisis in a stronger position than ever,” he said.
Members of Uber’s engineering team will be performing Pham’s duties until the company finds a permanent CTO, the spokesman said. A search effort is currently underway.
Pham, born in Vietnam, left the country as a refugee in 1979 and immigrated to the U.S. He earned a masters in electrical engineering and computer science at the Massachusetts Institute of Technology and worked at a variety of tech companies, including as an executive at software maker VMware Inc., before joining Uber as its CTO in 2013.
Pham notified the company on April 24 he was resigning effective May 16, according to filings. In a statement, Uber CEO Dara Khosrowshahi said he was “grateful” for Pham’s tenure. “As the leader of our engineering organization for the last seven years, Thuan has made important contributions that have helped make Uber into the global technology platform it is today,” Khosrowshahi said.
In the statement, Pham said that Uber’s engineering team was functioning at “peak productivity,” and added, “We have built robust system scale and stability, and are well prepared to face the future.”
Uber, which is unprofitable, cut more than 1,100 jobs last year. Before the coronavirus pandemic hit, the company had said it would turn a quarterly profit by the end of this year. Earlier this month the company withdrew its financial forecast for 2020 and said it would write down about $2 billion in investments impaired by Covid-19. Uber is slated to report earnings for the first quarter of 2020 on May 7.
More must-read tech coverage from Fortune:
—Who is new AT&T CEO John Stankey?
—Work from home tips from the executive team that brought you Zoom
—Is A.I. better at diagnosing illnesses than doctors? Don’t believe all the hype
—Facebook debuts Zoom-like video chat feature called Messenger Rooms
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.