fortune--2020-03-26--The world’s largest coronavirus lockdown is off to a rocky start

India’s 1.3 billion citizens, who make up nearly one-fifth of the world’s total population, are now entering day two of a 21-day coronavirus lockdown.
“The entire country will be in lockdown, total lockdown,” said Prime Minister Narendra Modi in a Tuesday address to the nation that has so far reported 519 coronavirus cases and nine deaths. “To save India, to save its every citizen, you, your family…every street, every neighborhood is being put under lockdown.”
Modi gave the world’s second-most-populous country a four-hour heads-up; police started enforcing the measure on Wednesday by arresting hundreds of people across the country for leaving their homes. The last-minute nature of the order caught the nation off-guard, causing the world’s largest COVID-19 lockdown to get off to a rocky start.
Lockdown trend
With the lockdown, India is following in the footsteps over a dozen other countries that have announced nationwide quarantine measures in response to the coronavirus pandemic, which has infected over 471,000 people around the world and killed upwards of 21,000, according to Johns Hopkins University.
The size of India’s population makes the scale of its lockdown unprecedented. Even in China, only the city of Wuhan and its surrounding area, the epicenter of the outbreak, were put under complete lockdown.
Modi communicated the lockdown on Tuesday on television and online, yet news of the drastic measure didn’t reach everyone, as news reports on Wednesday said some residents were confused as to why so few people were in the streets.
Economic impact
The lockdown is expected to devastate India’s economy.
The nation’s air travel industry, which is enduring a grounding of all domestic flights, is bracing for a loss of between $3.3 billion and $3.6 billion from April to June, according to CAPA India, an aviation consulting firm, Fortune India reports. India’s major carriers, such as Air India and IndiGo, may weather the lockdown with deeper cash reserves and potential financial assistance from the government, but smaller airlines might not survive.
“Although it is too early to come to a firm conclusion, what emerges on the other side may be a smaller, consolidated industry,” said CAPA India.
The coronavirus pandemic may prove a major setback to India’s hopes of becoming a global aviation powerhouse. India’s domestic airline industry represented the fastest-growing market in the world for four straight years until 2019, according to the International Air Transport Association.
India’s measures also pose a threat to the nation’s information technology sector, whose systems are vital to global commerce. India controls more than half of the world’s IT outsourcing market; its share of the industry serves over three-quarters of Fortune 500 companies and contributes roughly $58 billion a year to U.S. GDP.
With its work product based online, the IT industry is theoretically well-suited to shift to working from home, yet the lockdown has sent industry leaders in India scrambling. Some told Reuters they were unprepared for the rapid shift from office to home, citing various challenges, from a lack of equipment to regulations and privacy, as employees can often access projects only through secure, in-office networks.
“These days the challenge is not really the technology, the challenge is the regulations, and, in case something goes wrong, who’s going to take the responsibility,” a top human relations executive at an Indian IT firm told Reuters.
E-commerce emergency
Meanwhile, a field that should benefit from the lockdown—the country’s booming e-commerce sector—is also running into roadblocks.
The central government exempted e-commerce platforms from lockdown measures, yet some firms have reported snags at the local level.
BigBasket, India’s largest online supermarket, told its customers on Tuesday that the company was “not operational due to restrictions imposed by local authorities on the movement of goods in spite of clear guidelines provided by the central authorities to enable essential services.”
“We hope things will improve soon,” T.N. Hari, a senior executive at BigBasket, told Reuters on Monday.
Other major players like Amazon and the Walmart-owned Flipkart, which together control roughly 60% of India’s e-commerce market, had to temporarily suspend operations on Tuesday because of the lockdown restrictions. Later that day, Amazon announced that during the lockdown it would deliver only essential services like groceries. On Wednesday, Flipkart followed suit, yet there were still reported incidents of local authorities blocking deliveries of essential goods.
There are growing calls for a lockdown similar to India’s in countries like the U.S. Mass quarantines—like that of Wuhan and its surrounding area—have proven effective in controlling the spread of coronavirus, but the sheer scale of India’s effort makes it the ultimate lockdown test.
More coronavirus coverage from Fortune:
—Will ‘The Great Cessation’ be worse than the Great Recession?
—The U.S. needs more ventilators. Why can’t it make them in time?
—Which stores are open—and closed—during the coronavirus pandemic in the U.S.?
—College students struggle to find housing as the coronavirus pushes them off campus
—How to upgrade the background of your video chats
—IBM and The Weather Channel debut coronavirus map
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: World leaders and health experts on how to stop the spread of 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--2020-03-25--Though coronavirus-driven uncertainty reigns, Lowe’s CEO says business is holding up

How one of America ’ s best places to work is navigating an uncertain , high-tech future

Like many retailers that sell items considered essential, Lowe’s is seeing some benefit from the coronavirus outbreak (beyond just being able to keep stores open).
Shoppers are buying large appliances like freezers and refrigerators to store food they’ve purchased in preparation for staying home for extended periods of time, says Lowe’s chief executive Marvin Ellison.
They’re also “seeing people start to work down that to-do list and get those things done in their homes,” Ellison tells Fortune. That includes getting tools to fix items like water heaters, or just replacing them outright. The interview with the CEO was a rare business update for Lowe’s outside of the company’s regular quarterly reports.
Ellison wouldn’t quantify how business is going for Lowe’s right now—the company just passed the middle of the first fiscal quarter of the year—beyond saying it’s holding its own. Though Ellison does acknowledge that given the unknown trajectory of the outbreak and its impact on the economy, things could change. There is also the question of what will happen to the housing market, which has been strong for years, lifting both Lowe’s and Home Depot.
“We feel good about where we are, but this is a very fluid situation,” says Ellison. “We just don’t know what the trends are going to be in two weeks or three weeks.”
And the uncertainty around the outbreak comes at a particularly fraught time for Lowe’s. Unlike most retailers, the home-improvement chain’s busiest time of year is April and May, when Americans (and their contractors) shake off winter and start home projects.
Lowe’s is, of course, not the only retailer still open that is concerned about the future. Target CEO Brian Cornell on Wednesday said that comparable sales had risen 20% in March so far, yet he pulled Target’s 2020 financial outlook, cut capital spending, and halted share buybacks.
Despite the uncertainty, Lowe’s will still ramp up hiring of temps for the upcoming peak season at about the same levels as last year.
Even as people shop at Lowe’s to pick up essentials, there is one area of missed opportunity for the chain: e-commerce. At a time many shoppers are hesitant to set foot in a store lest they be exposed to the virus, Lowe’s digital business is still floundering. In its most recent quarter, sales on its website rose 3%, an anemic rate for any major retailer. (At Home Depot, they grew 21%.)
Though Lowe’s has had some success in modernizing its site, the chain would have an easier time navigating the current turmoil with a website that was up to industry standards.
“We’re not where we’d like to be, but the improvements we’ve made are allowing us to serve customers much better in this environment than we could have in the past,” Ellison says.
Another option that could have helped Lowe’s now would be to offer curbside or parking lot pickup of online orders. But the company is still in the process of rolling the service out, and it won’t help in the short term. (Home Depot doesn’t offer that option.)
As for its stores, Lowe’s is taking the same steps many other retailers are to protect workers and customers from contact with COVID-19. The company has set up markers at checkout lanes to help customers respect social distancing and cleans the area around the cash registers more often. It also announced $80 million in financial incentives for store workers on Wednesday.
For now, Ellison hasn’t seen the need to preserve cash by taking steps that other retailers have in the past week, such as cutting Lowe’s dividend, suspending share buybacks, or tapping its credit line. But he did allow that Lowe’s will regularly assess whether it needs to rethink those options in this “unprecedented crisis.”
More must-read stories from Fortune:
—Which stores are open—and closed—during the coronavirus pandemic in the U.S.?
—Some Amazon Prime shipments won’t arrive for a month due to the coronavirus
—What Helena Foulkes learned about retail and leadership as CEO of HBC
—Will the coronavirus finally get Americans to embrace the bidet?
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: The greatest designs of modern times
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fortune--2020-04-16--Uber withdraws forecast and will write down about $2 billion

Why the U.S. government needs a new corporate bailout structure—one that doesn ’ t rely on loans

Uber withdrew its financial guidance for 2020 and said it will write down about $2 billion in investments after the coronavirus pandemic upended the ride-hailing business.
The San Francisco-based company said the writedown of its minority investments will range from $1.9 billion to $2.2 billion. Uber holds shares in various ride-hailing and food delivery businesses around the world. The company valued holdings in China’s Didi Chuxing and Southeast Asia’s Grab at a combined $10.3 billion at the end of last year. It didn’t identify which investments were driving the charge.
A financial assistance program created by the company for drivers and delivery people coping with the effects of the virus will have a marginal impact on revenue. The result will be a $17 million to $22 million reduction in that quarter and $60 million to $80 million in the second quarter, Uber said.
Shares rose as much as 8.5% in extended trading after Uber’s statement Thursday. Investors had been bracing for much worse. The stock took a nosedive in early March when the virus was spreading throughout the U.S. and Europe, but it has since recovered some of those losses. Uber assuaged many shareholders last month in a call with analysts drawing attention to its cash cushion of at least $4 billion.
Rides have fallen by as much as 70% in some of the hardest-hit cities, Uber has said. But the company could offset some of that shortfall with food delivery, which is experiencing a surge in demand as people stay at home.
Uber is scheduled to release its quarterly report on May 7. “Given the evolving nature of Covid-19 and the uncertainty it has caused for every industry in every part of the world, it is impossible to predict with precision the pandemic’s cumulative impact on our future financial results,” the company said in a statement.
More must-read tech coverage from Fortune:
—How the coronavirus stimulus package would change gig worker benefits
—Zoom meetings keep getting hacked. How to prevent “Zoom bombing”
—Why China’s tech-based fight against the coronavirus may be unpalatable in the U.S.
—Hospitals are running low on the most critical supply of all: oxygen
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-16--Why the U.S. government needs a new corporate bailout structure—one that doesn’t rely on loans

Uber withdraws forecast and will write down about $ 2 billion

The good news from Washington is that despite partisan divides, Congress and President Donald Trump moved swiftly to enact the CARES Act in response to the COVID-19 crisis. The bad news, however, is that the deal’s remedy for big distressed corporations—businesses with more than 10,000 employees—is a large-scale lending scheme. Even worse, the Federal Reserve has doubled down on lending, with the announcement of plans to expand corporate debt backstops through the purchase of junk bonds.
Even with the Fed’s latest move, the need for additional stimulus measures is becoming clearer by the day. The current approach burdens companies with debts that could jeopardize their own recoveries, unleashing further unemployment and other challenges for the broader economy, such as prolonged supply-chain disruptions and lost tax revenue from failed businesses. Problems that would in effect nullify the relief effort.
As lawmakers mull the need for another relief package, they should move away from lending and instead support large corporations by facilitating government purchase of preferred stock, which offers companies a faster route to plugging holes in their cash reserves and puts them in a stronger position to rebound once normal economic activity begins to resume.
One issue with making big loans at low interest rates is that some corporations may use the loans for purposes unrelated to the current crisis, such as stock buybacks. Though the CARES Act prohibits that, the law gives broad discretion to the Fed and the Treasury Department, which are unlikely to saddle the structure of the program with too many regulatory conditions—meaning that other self-serving uses of funds, like boosting executives’ pay, could be fair game. What’s more, the recent dismissal of the oversight panel’s chair has cast doubt on the administration’s interest in enforcing restrictions on the stimulus spending.
Since many corporations—even healthy ones—are scrambling for loans, it will be difficult for the government to sift through an influx of applications to determine, within a short time frame, which companies most deserve help.
And government lending, of course, adds to corporate debt. Meeting obligations to repay that debt in the future may create liquidity problems and divert a corporation’s cash away from payrolls or more socially valuable expenditures, particularly in a period of recovery.
What this crisis requires is a solution that ensures funds go to the companies that actually need them, quickly, and without unintended consequences. In crafting a new support package, policymakers should recognize the flaws of large-scale lending and consider an alternative: The U.S. government (either the Fed, the Treasury, or another new entity) should buy newly issued preferred stock of publicly traded corporations.
Unlike common stock, preferred stock carries no vote, but payouts to holders of preferred shares cannot be lower than payouts to holders of common shares; this often means guaranteed dividends and other provisions that make the preferred shares less risky in exchange for the absence of voting rights. A preferred stock solution would enable the government to get cash to corporations quickly, limiting what would otherwise be a flood of bankruptcies that the U.S. courts and distressed finance sector simply could not handle.
This approach also levels the playing field by de-incentivizing government support for corporations that don’t really need it. While healthy corporations could receive loans under the current program to bolster their security nets, they would likely stay away from selling preferred shares so as to avoid diluting the company’s capital.
While government loans increase a company’s leverage—and therefore limit potential future borrowing—an equity issue decreases a company’s leverage, making it easier to secure further loans from other sources, avoiding a rise in future liquidity problems.
Making preferred stock purchases a key element of the way forward could also help the U.S. government reap massive profits down the road. Many of the 2008 to 2009 bailouts allowed the government to receive stock. The American International Group (AIG) bailout, in particular, gave the government substantial equity participation in return for bailout money and generated a considerable amount of money for the government—$22.7 billion by the Treasury’s count.
That leaves one important detail: the price. Typically, the market value of preferred shares is lower than the market value of common shares. Negotiating the appropriate discount for each company could lead to costly delays, especially given the ongoing market volatility. Pricing the preferred stock at the same level as—or as close as possible to—common stock would simply save time. Under the CARES Act, businesses large and small across the economy will receive massive financial support from the federal government. As lawmakers ponder on a fourth-phase stimulus package, they should take time to craft a better solution for large listed companies—one that gives struggling businesses a much-needed cash injection without leaving them or the government tangled in a web of debts that may never be paid off.
Ken Judd is a senior fellow at Stanford University’s Hoover Institution.
Karl Schmedders is a professor of finance at the International Institute for Management Development (IMD) in Lausanne, Switzerland.
More opinion in Fortune:
—Coronavirus relief funds should be used to pay workers, not bail out corporations
—Why the U.S. shouldn’t let China dominate the digital currency race
—The coronavirus pandemic is changing work forever
—Coronavirus should inspire businesses to prepare their supply chains for the future
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: CEO of Canada’s biggest bank on the keys to leading through the coronavirus
Listen to our audio briefing, Fortune 500 Daily


fortune--2020-04-16--Coronavirus tests and their discontents

Coronavirus tests and their discontents

Good afternoon, readers.
This week, drug and medical device giant Abbott announced that it had produced yet another coronavirus test. But this one comes with a twist.
Abbott’s previous tests were meant to suss out active coronavirus infections (including a point-of-care test that can return results within five to 13 minutes—though the availability of those tests are, well, complicated).
This latest Abbott COVID-19 diagnostic, however, is a so-called antibody test. It’s a blood test which can detect whether or not you’ve recovered from a coronavirus infection.
Why is that significant? It’s a key indicator of who can possibly return to the re-opening of society and businesses. Someone who’s recovered will (probably) have immunity to the pathogen for a while, according to multiple sources I’ve spoken with.
But that science is still unclear—and the specter of subpar tests looms large. FDA commissioner Stephen Hahn has regularly been warning of fake COVID-19 testing kits for the past three weeks. In general, the efficacy of various tests, whether they be antibody test or others, will take months to determine.
And it’s important to remember that none of these tests are actually approved by the FDA—emergency authorization is a whole different animal. I explored this at length last week in a piece about the various coronavirus diagnostics hitting the scene. Even that picture has changed in a rapidly shifting scenario.
Read on for the day’s news, and see you again next week.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Virtual trials are changing the face of patient care. I'll have a larger piece on this within the next week, but I've been having some fascinating conversations with one particular rare disease nonprofit about the effect that the coronavirus crisis has had on their organization and partners. These patients, who suffer from a neuromuscular disease, already face challenges when it comes to mobility. The downstream mental health effects of this pandemic, alongside the difficulties of conducting clinical trials, has had fascinating implications. Many of those are disheartening, but some also showcase the ability of patient communities and organizations dedicated to helping some of our most vulnerable populations to step up in a time of crisis, including with the use of digital tools. Stay tuned.
INDICATIONS
Gilead shares spike on COVID-19 recovery data. Gilead's antiviral for treating COVID-19 has produced early, promising results, according to STAT News. And investors are ecstatic. The biotech giant's shares soared more than 14% after the close of trading—an astonishing rise for one of the biggest pharmaceutical companies in the world. This is still preliminary data in these studies, but they suggest that patients with the most severe forms of COVID-19 illness may be able to recover to some extent with the drug remdesivir and alleviate human suffering and strains on the medical system. (STAT News)
THE BIG PICTURE
New York may finally be controlling its coronavirus spread. New York has been one of the major hotspots of the coronavirus crisis, but it may finally be turning the corner. Governor Andrew Cuomo on Thursday said that hospitalizations and deaths related to COVID-19 had fallen to their lowest levels in more than a week. But that doesn't mean anything will return to normal in a matter of weeks—Cuomo also said that business and school closures would be extended to mid-May. The success of social distancing doesn't mean that it should end immediately—the process is working and needs to persist to prevent the possibility of a second wave of infections. (Reuters)
REQUIRED READING
How to spend your stimulus check so it will have the most impact, by Anne Sraders
The real unemployment rate is likely nearing 18%, by Lance Lambert
How Fortune 500 companies are reacting to the pandemic, by Jaclyn Gallucci & Maithreyi Seetharaman
Sign up for other Fortune newsletters.


fortune--2020-04-16--Scammers are posing as banks to steal stimulus checks, Secret Service warns

Your phone rings. Your caller ID shows the name of your bank, so you answer. A concerned customer service worker tells you that, to ensure your government stimulus funds get to you, he needs to confirm a few bits of information. You gladly hand it over, reassured to know your bank is looking out for you.
Congratulations. You’ve just been robbed.
The Secret Service and Visa say that, since the beginning of the coronavirus pandemic, they’ve seen a rise in sophisticated phone scams in which fraudsters imitate victims’ banks to obtain key security information, then drain their accounts. They’re urgently warning Americans to be even more cautious than usual about sharing sensitive information, even if they think they’re talking to someone trustworthy.
Above all, they warn victims that no bank or government agency will ever call them and ask for sensitive information, making such questions a sure sign of a fraud attempt.
Con artists are revving up operations of all sorts that exploit coronavirus fears or steal relief funds directly. But bank impersonation may be the most frightening: The combination of crisis-driven anxiety and highly sophisticated fraudsters mean even cautious people can become victims.
“It’s anyone and everyone,” says Lori Hodges, vice president of risk for Visa in North America. “Students, professionals, the elderly.” Hodges says she’s even aware of fraud-prevention professionals who have fallen victim.
The con’s opening gambit—using a caller ID that appears to come from the target’s bank—can be accomplished using a variety of methods, including through Internet-based phone services, or VoIP. From there, the thieves, posing as bank representatives, will claim they need to confirm the victim’s identity, either to speed delivery of relief funds, or even to help stop fraud. But the information they ask for is really intended to help them divert funds or gain access to your bank account.
The scam, a form of “voice phishing,” is so insidious in part because fraudsters have access to huge amounts of information about their victims.
“They already know enough about you to get a conversation going,” says Thomas Edwards, a special agent in charge with the Secret Service. That can include even sensitive information such as Social Security numbers, quickly convincing victims that the call is legitimate.
Criminals have the info thanks to the many data breaches over the past decade. Hodges specifically cites incidents like the 2017 Equifax hack as a source of data fraudsters can now leverage to gain victims’ trust.
“Then they’re going to try and get other information,” continues Edwards. That may include asking for the answer to your bank security questions, your ATM personal ID number, the three-digit security code on a debit or credit card, or a one-time security code sent by your (real) bank.
Once they get that information, thieves will drain your account “as fast as they can, through multiple channels,” says Hodges. That can include simply pulling out cash through an ATM using a fake debit card, or taking over your bank account directly and transferring funds out.
Luckily, there is a simple way to avoid being a victim.
“Do not give any personal information to people who are calling you inbound,” says Hodges. “If you have questions about that call, hang up and call your bank back directly.” While banks may ask you to verify your identity in some way if you call them, she says, they will not request security information if they’re calling you.
The same goes for any caller claiming to be from a government agency, says Edwards. “The government, IRS, or Treasury are not going to contact businesses to arrange a stimulus check. There’s no reason to entertain these calls.”
Attorney General William Barr has directed U.S. law enforcement and federal attorneys to focus efforts on catching coronavirus scammers during the crisis. To aid that effort, Edwards urges any victims, even of relatively small scams, to report crimes to the National Center for Disaster Fraud, a special agency in the Department of Justice.
“Losing $300 or $500 might not seem like a big deal to some of us,” says Edwards. “But we’re trying to put together pieces of the puzzle. Every piece of data counts.”
More must-read tech coverage from Fortune:
—How the coronavirus stimulus package would change gig worker benefits
—Zoom meetings keep getting hacked. How to prevent “Zoom bombing”
—Why China’s tech-based fight against the coronavirus may be unpalatable in the U.S.
—Hospitals are running low on the most critical supply of all: oxygen
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-16--Gilead stock surges on report of coronavirus drug patients ‘seeing rapid recoveries’

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Gilead Sciences Inc. shares climbed in late trading Thursday after a report that a group of patients being treated in Chicago were “seeing rapid recoveries in fever and respiratory symptoms.”
The report, from the medical news publication Stat, cited a video made by a researcher at the University of Chicago who is helping conduct a trial of Gilead’s drug remdesivir. The researcher, infectious disease professor Kathleen Mullane, said that most patients had been discharged from the hospital and only two had died, according to Stat.
Gilead’s drug is one of the most-watched therapies being studied for treatment of COVID-19 patients. It’s conducting two trials of the drug in moderate and severe patients, with the goal of enrolling 4,000 people in the trials. The University of Chicago enrolled 125 patients, most of whom had severe disease, according to Stat.
Shares of the company surged 10% in trading after the market closed.
The Chicago results are a tiny but promising sliver of the overall trial. Almost all patients recover from the disease, which has made it important to conduct tests which compare treatments against a placebo. While the trial in moderate patients contains a placebo group, Gilead’s trial of severe patients does not.
Mullane didn’t immediately respond to a request for comment. Researchers have collected information from the first 400 patients enrolled in the trial and Gilead plans to “lock” the data on Thursday, meaning the results could come soon, Stat said.
More coronavirus coverage from Fortune:
—22 million lost their jobs in the past month—real unemployment rate likely near 18%
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Inside the surreal “Mask Economy”: Price-gouging, bidding wars, and armed guards
—The IRS just launched “Get My Payment” portal for tracking your stimulus check status
—How every sector of the S&P 500 has been impacted by the coronavirus selloff
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
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—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--2020-04-16--Coronavirus is improving employee benefits—and they may stay that way

As employers have struggled to find and keep top talent, benefits had increasingly become an area of focus for employers in recent years. Not only Big Tech companies became famous for their employee benefits and perks, but even standard offerings, like health insurance, paid leave, and wellness programs, were often improved across other industries.
One example is the incremental adoption of more generous leave policies than required by the federal Family and Medical Leave Act. From 2018 to 2019, there was a 6% increase in family leave and a 3% jump in elder care leave, according to the SHRM 2019 Employee Benefits Survey. 56% of organizations with fewer than 500 employees reported providing the minimum required amount of leave specified in the FFCRA, and 26% report that they provide more, according to the same survey.
But on April 1, after March ended with 10 million people who applied for unemployment benefits, the Families First Coronavirus Response Act (FFCRA) went into effect. It requires that some employers (including certain public employers and private employers with fewer than 500 workers) provide up to two weeks of fully paid sick leave for employees that are quarantined or have COVID-19 symptoms and two weeks of paid sick leave at two-thirds pay if they need to care for someone in quarantine. It also requires 10 weeks of paid family and medical leave at two-thirds pay for employees whose child’s care provider or school is closed due to COVID-19.
These provisions will apply until December 31, 2020, but they might have a long-lasting effect. Post-COVID research from SHRM has shown that roughly one-third of companies are offering additional paid leave and one-third are offering additional unpaid leave—and more plan to do so (18% paid and 25% unpaid). Just over half of larger organizations report that they are implementing benefits similar to those offered under the FFCRA even if not required to do so.
Health and well-being
Employers were using technology as a way to cut costs in employee well-being before the pandemic began. Telemedicine and telehealth increased 10% year over year, and 72% of employers offered that benefit in 2019. Since the pandemic, 86% of companies are encouraging employees to access telemedicine or telehealth services if they need care, the post-COVID SHRM’s survey found.
SHRM’s subsequent research found that, since the COVID-19 outbreak, about 19% of organizations reported that they are paying health premiums in order to maintain a sufficient workforce during the pandemic, and nearly another 10% are considering it. Roughly 15% have added new employee assistance program offerings.
Gusto, a San Francisco payroll and benefits company, already offered online therapy sessions, but has begun promoting them to its 1,300 employees, anticipating an increased interest due to COVID-19. The company has a robust suite of benefits offerings, such as stipends for house cleaning and breast milk shipping services for new parents. In the age of social distancing, those dollars are more likely to be spent on grocery deliveries. .
Remote work and employee engagement
Employers had been placing greater emphasis on helping employees manage work-life balance, including flex time and remote work. There was a 5% increase in part-time telecommuting from 2018 to 2019, for example, and more immediate efforts were focused on ensuring employees have what they need to work remotely.
The pandemic has accelerated those efforts. A Willis Towers Watson survey released on April 10 found a dramatic increase in remote work: 39% of respondents said more than three-quarters of their workers could now work remotely compared to just 14% prior to the pandemic. Almost all employers (97%) are promoting social distancing and increased cleaning and access to disinfectants for in-office workers.
The post-COVID-19 SHRM survey found that half of companies are covering remote work costs, including boosts to internet speed, data overages, laptops, monitors and the like. When its entire workforce began telecommuting, Gusto paid a one-time stipend to workers to cover additional remote work expenses, according to Maryanne Brown, Gusto’s People Team chief of staff. “A pretty big area of focus was taking care of that foundational [technology] element,” she says.
iHeartRaves, a festival fashion company based in Anaheim, California, has suffered an 80% revenue loss as music festivals cancellations have mounted after the pandemic. The company has furloughed 20% of its workforce, but the team has combined pay adjustments and job-sharing strategies to try to keep as many of its 75 employees as possible.
The company is paying a 15% weekly bonus to its warehouse workers, but it has not yet made long-term benefits changes. It does, however, expect that more employees will work from home after the COVID-19 outbreak, but says CEO Brian Lim. As organizations like iHeartRaves look toward a future after the virus subsides, they will need to find ways to address their employees’ needs—which will undoubtedly change after this forced shift in workplace culture.
More must-read careers coverage from Fortune:
—How Fortune 500 companies are stepping up during the pandemic
—3 ways to put your best foot forward on a video job interview
—Everything you need to know about furloughs—and what they mean for workers
—The coronavirus could change how freelancers work in the long term
—Accenture and Verizon work to help furloughed or laid-off workers find new jobs
—WATCH: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
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fortune--2020-04-16--Trump wants to reopen the U.S. economy by May 1. But what can he open?

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As the U.S. wrestles with how to contain the coronavirus while also saving the economy, President Trump declared this week he wants to implement “a very powerful reopening plan” in coming days—”maybe even before the date of May 1.”
The call for “reopening” is a response to governors in a large majority of states who have ordered most businesses to close. But already some governors have suggested May 1 is too soon to end their shutdowns, raising the specter of a collision between the White House and state leaders.
It also raises the question of what spaces in the country the President can or can’t open. On Monday, Trump declared he had “total authority” over when the states can restart their economies—a claim he has since walked back after legal scholars across the political spectrum claimed it had no basis.
“I share the view of pretty much everyone that the total authority claim is total nonsense,” said Deborah Pearlstein a professor of constitutional law at Cardozo Law School.
Pearlstein cited the Tenth Amendment of the U.S. Constitution, which reserves most powers—including over commerce and civil liberties—to the states. And while the federal government has power over interstate commerce, that power must be exercised by Congress not the President.
Even for key federal infrastructure such as ports, airports and Interstate highways, the President does not have the power to unilaterally open or close them, says Pearlstein. On Thursday, perhaps acknowledging this reality, Trump reportedly told the country’s governors “You’re going to call your own,” prior to issuing updated guidelines.
So does Trump have any power to “reopen” the economy? It turns out he does, but they are mostly indirect ones he can use to exert influence rather explicit legal ones. For instance, he can exert political pressure on governors through federal guidelines or, more informally, through his bully pulpit on TV and Twitter.
Pearlstein also notes that he could ask the Justice Department to sue states that don’t heed his demands they reopen, but that he would certainly lose in federal court. She says it’s more likely that the President would withhold equipment or federal funds from states that don’t comply.
But in the absence of an act of Congress, withholding funds for highways or health services would be illegal, Perlstein says, but adds that Trump may nonetheless attempt such tactics.
“One can imagine this President trying to withhold health care funds to the state of NY. That would be illegal and very troubling but the mechanisms that usually exist to prevent that, such as Inspectors General or Congressional subpoena power are substantially disabled,” Pearlstein says, explaining that Congress is out of session and that Trump has previously failed to heed Inspectors General.
There is also the President’s power over the military. While the armed services largely can’t be used for law enforcement, the military can play an important role in transportation and other logistics. As such, the President could deploy or withhold such resources—including Navy hospital ships or delivery of N95 masks—from states whose governors defy his request to reopen.
All of this means that, in coming weeks, the President will be able to exercise little direct authority to compel the country’s businesses to reopen. But he could nonetheless use considerable soft power to pressure states to do his bidding.
“It depends how much hardball he wants to play,” says Perlstein.
This story was updated at 4:30pm ET to reflect Trump’s remarks to the governors.
More personal finance coverage from Fortune:
—What to do if you can’t pay your bills this month
—Stimulus checks are depositing: How people are spending the money
—Couldn’t track your stimulus check? Errors and long waits plague IRS portal rollout
—What you should know about mortgage forbearance and skipping payments
—Everything you need to know about furloughs—and what they mean for workers
—Freelancers and independent contractors can now apply for SBA Paycheck Protection Program loans. What you need to know
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO


fortune--2020-04-16--SBA small business funding grinds to a halt as Paycheck Protection Program loans run out. What’s nex

SBA small business funding grinds to a halt as Paycheck Protection Program loans run out. What’s next?

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That was fast.
Needy small businesses have struggled to receive lifeline funding to keep employees on the payroll over the past two weeks, and now the money has run out. That leaves those like James Fayal, the founder of Baltimore-based caffeinated tea company Zest Tea, in a worrisome spot.
Fayal applied through Bank of America for the Paycheck Protection Program loan when applications first went out, seeking a $125,000 loan for his 8 employees. But it was actually on Wednesday that Fayal felt the first wave of disappointment about the status of his loan: “By [Wednesday], I sort of accepted that [funds for the PPP loans are] going to run out probably before I get any communication, so yesterday was probably the day of the most disappointment.” He says he still hasn’t received an update on his loan’s approval status from Bank of America, and now that funds for the PPP loans have run out, “All I can do now is hope that there are gears turning behind the scenes and they’ve already submitted but I haven’t found out yet.” A Bank of America spokesperson told Fortune the bank is continuing to accept and process applications “in the expectation that there will be additional funding available.” (The bank told Fortune it has received about 370,000 applications seeking $50 billion).
Emergency loans from the Small Business Administration, under the Paycheck Protection Program, have been an exasperating ordeal for the SBA, lenders, and small businesses since applications were opened on April 3—But on Thursday, the administration announced loans had maxed out the $349 billion allotted for the program.
At around 10:30 a.m. ET, an SBA spokesperson announced the SBA was “currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time.” In a joint statement, U.S. Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza said Wednesday “By law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations.”
The small business loans are first-come, first-served, can potentially become grants, and are available up to $10 million per business.
Sen. Marco Rubio tweeted on Wednesday afternoon that the loans would be capped at $339 billion until further funds are approved, as $10 billion would be needed to cover fees and processing.
Here’s the math
Congress approved $349 billion to guarantee #PPP
At 2pm today had over $300 billion in approved #PPPloans
Need $10 billion to cover fees & processing
When we reach $339 billion limit PPP will stop until they end with the ridiculous games & approve more funds — Marco Rubio (@marcorubio) April 15, 2020
As of around 8:45 a.m. ET on Thursday, the SBA confirmed it had approved over 1.6 million applications worth over $339 billion. An SBA report shows the average size of PPP loans approved was $239,152.
Now what?
Mnuchin and Carranza urged Congress on Wednesday to appropriate more funds for PPP loans, “at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks.”
Congress has thus far struggled to approve more funds for the program, as Republicans and Democrats have differing views on how the $250 billion in additional funds should be meted out. An effort by Republicans to unanimously approve more funding last week was stymied as Democrats advocated for more money to go to hospitals, food assistance, and state and local governments (in addition to more funding for PPP loans).
A senior Democratic aide told CNBC that staffers for Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi are expected to continue talks with the Treasury Department about new funding on Thursday.
Although well over 1 million applications were approved this time around, there are still plenty of businesses awaiting the funds—Yet even the initial $350 billion was a tall order for the SBA and lenders alike to handle. “The SBA has processed more than 14 years’ worth of loans in less than 14 days,” Mnuchin and Carranza noted in a statement. (In 2019, the SBA guaranteed a total of $28 billion in loans.)
The rollout of the program was plagued with issues from the beginning, as dozens of small business owners took to Twitter on the day of its launch to express frustrations as banks like Bank of America initially prioritized current lending customers. To wit, independent contractors and self-employed individuals were only able to begin applying for the loan on April 10, less than a week before funds ran out.
One big problem with the rollout of the PPP was its initial exclusion of non-SBA enders—including fintechs that often cater to small businesses with differing loan needs. Without other lenders like fintechs or smaller institutions able to lend to their normal client base initially, “Ironically, the very small businesses who are the ones … most at risk from this economic crisis and least resilient … are going to be the last ones in line to get money because they’re not existing bank customers, and their lenders who they trust and rely on are not able to access the program,” Plaid’s head of policy John Pitts recently told Fortune. Fintechs (including PayPal) and other non-SBA lenders were able to begin accepting applications last week after receiving an application to become an SBA-approved lender.
Another round of funds would be necessary to keep lending to businesses who already applied but hadn’t been approved yet, and for those who hadn’t been able to apply yet.
“The worst thing you could do is have desperate small businesses that have a loan application pending to tell them that, ‘Well, we’re going wait to decide what we want to do on additional funding,'” Paul Merski of the Independent Community Bankers of America told Bloomberg Wednesday.
Some fortunate small business owners like Leah Sherrill, who applied for the loan for her Texas-based preschool and childcare center, heard she was approved “not a second too soon!”
Sherrill tells Fortune she was informed by her bank American Momentum on Thursday that her $84,900 loan was approved. Sherrill says she plans to rehire two employees who were laid off, asking them to return to work on Monday.
Update, April 16: This article has been updated with a comment from Bank of America.
More must-read finance coverage from Fortune:
—Are SBA small business loans running out? What we know so far
—CEOs David Solomon and Brian Moynihan stand alone on Wall Street—literally
—College educated investors may be more likely to fall for coronavirus scams
—Stocks have gained 25% since their March lows—but the math doesn’t add up
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-16--Dogs may be able to sniff out coronavirus superspreaders

Finding virus carriers—especially those with no symptoms—is among the biggest hurdles to addressing the pandemic.
But what if dogs can do that? Scientists in London say that dogs could in fact revolutionize the hunt for COVID-19 by sniffing out subtle odors produced by the virus when within the human body. The London School of Hygiene and Tropical Medicine is crowdfunding a project to train canines to detect healthy-seeming people who haven’t necessarily realized yet they are carriers. If the project is successful, the animal detectives could be working across Britain by the summer.
“It’s very early stages,” says James Logan, head of LSHTM’s Department of Disease Control. “We know diseases have odor —including respiratory diseases such as influenza—and that those odors are in fact quite distinct. There is a very, very good chance that COVID-19 has a specific odor, and if it does I am really confident that the dogs would be able to learn that smell and detect it.”
Dogs with a highly developed sense of smell are already used to diagnose many medical conditions, including Parkinson’s disease and several types of cancer. The LSHTM itself has already trained up animals—labradors and cocker spaniels tend to be especially suited—to detect malaria. Their success rate far exceeds required WHO standards, the center says.
If the project works, the dogs could be deployed to screen staff at hospitals and care homes and, once regular travel resumes, sniff out unwitting carriers at airports and rail stations. Capable of screening thousands of people per day, the dogs could be a key tool for getting daily life back to normal quickly and safely.
More coronavirus coverage from Fortune:
—22 million lost their jobs in the past month—real unemployment rate likely near 18%
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Inside the surreal “Mask Economy”: Price-gouging, bidding wars, and armed guards
—The IRS just launched “Get My Payment” portal for tracking your stimulus check status
—How every sector of the S&P 500 has been impacted by the coronavirus selloff
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
—Military experts: We need to fight coronavirus like we fight insurgents on the battlefield
—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--2020-04-16--New York’s MTA to seek $3.9 billion of U.S. aid due to coronavirus losses

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New York’s Metropolitan Transportation Authority, the largest mass-transit system in the nation, will ask for an additional $3.9 billion of federal aid as the agency estimates the financial impact of the coronavirus may reach $8.5 billion and projects ridership this year won’t return to pre-pandemic levels.
The MTA’s revenue is in a free-fall as people stay at home and avoid using the system. After a nearly $4 billion federal allocation to help cover lost revenue, the agency needs additional funds to stop the MTA’s “immediate financial hemorrhaging” and help support the region’s economy, which accounts for 10% of the nation’s gross domestic product, Pat Foye, the MTA’s chairman and chief executive officer, said during a press briefing on Thursday.
“The nation needs a strong New York to lead the recovery from this pandemic,” Foye told reporters.
With New York City at the epicenter of the pandemic in the U.S., the effects on the MTA are dramatic. Ridership on MTA subways and commuter-rail lines is down about 95%. The virus has killed 68 MTA workers, and more than 2,400 subway and bus employees have tested positive, Foye said.
Capital markets
Additional federal assistance may help the MTA as it looks to access the capital markets. The agency plans to sell bonds to help rollover short-term debt that matures on May 15, said Bob Foran, the MTA’s chief financial officer.
“We believe the market will continue to be there for us, but we need the support of the federal government to give the investment community even greater confidence that MTA will make it through this pandemic and regain our financial standing,” Foran said.
Restoring ridership will take time. The MTA estimates ridership by the end of 2020 will only be 50% to 60% of where it was before the virus struck, according to Janno Lieber, the agency’s chief development officer.
Fare-box and toll revenue losses in 2020 may reach $5.9 billion and the agency anticipates additional declines in 2021, according to Foye. The MTA estimates its share of dedicated state and local taxes to drop by as much as $1.8 billion this year. Cleaning and disinfecting costs are increasing.
More coronavirus coverage from Fortune:
—22 million lost their jobs in the past month—real unemployment rate likely near 18%
—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
—Inside the surreal “Mask Economy”: Price-gouging, bidding wars, and armed guards
—The IRS just launched “Get My Payment” portal for tracking your stimulus check status
—How every sector of the S&P 500 has been impacted by the coronavirus selloff
—If you’ve been a little busy lately, here’s what’s going on with the 2020 election
—Military experts: We need to fight coronavirus like we fight insurgents on the battlefield
—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--2020-04-16--Facebook-backed Libra plans multiple single-currency coins

Facebook and its partners said their Libra cryptocurrency project will now support multiple versions of the digital coins, the majority of which will be backed by individual fiat currencies like the U.S. dollar, as part of changes made to appease skeptical regulators worldwide.
The Libra Association, the governing body overseeing the proposed project, redesigned the currency and made other changes responding to financial regulators concerned the effort could undermine the power and control of central banks. The group said Thursday it plans to support multiple Libra stablecoins, with each working like a digital version of a country’s existing currency.
The organization has also begun talks with Swiss regulators for a payments license, and hopes to register with FinCEN, the U.S. Financial Crimes Enforcement Network, as a “money services business,” according to Dante Disparte, head of policy for the Libra Association. “We’re working toward a late 2020 readiness timeline” to launch the Libra network, Disparte added.
When Facebook unveiled Libra 10 months ago, it intended to create a single global currency that would be pegged to a basket that included fiat currencies, like the U.S. dollar and euro, and securities like treasuries. That plan faced criticism from politicians and regulators worried that Libra could usurp some power from central banks, who use money creation as a tool to influence and protect markets, or be used for black-market purposes, like money laundering.
After months of discussions, the Libra Association has backpedaled on those initial plans, though it still hopes to create a version of the Libra currency made up of “a digital composite of some of the single-currency stablecoins,” the organization wrote in a white paper published Thursday. Bloomberg previously reported on the association’s plans to offer multiple versions of the Libra currency. Facebook has said it won’t launch Libra without regulatory approval, but it’s unclear whether the changes will appease critics and financial officials.
“Which currency will be adopted and used will vary by use cases,” said Christian Catalini, head economist for Facebook’s Calibra division, which created the project. He suggested that when sending money across borders, the multicurrency Libra could be a better option, whereas the single-currency stablecoins would make more sense for everyday purchases in a consumer’s home country.
The restructuring could help Libra with regulation. The original plan led some to characterize Libra as a security, a designation that brings much greater regulatory oversight. Some central banks also worried that a popular coin backed by a basket of currencies would undermine their ability to manage fluctuations of their home currency, a concern the Libra Association acknowledged in its white paper.
The changes could also potentially clear the way for more companies to join the association as members, perhaps lowering the risk of backlash from regulators. Many of the original high-profile participants left the organization before it signed a charter, including Visa Inc., Mastercard Inc. and PayPal Holdings Inc. Disparte said that adding banks as partners on the project is a “massive priority.” The association will need banks, for example, to help manage the reserve funds for the Libra currency. “We’re not a banking institution and we don’t aim to be,” he said.
Included in the association’s update was a change in plans for its Libra blockchain. Last year, the group said it planned to eventually let anybody participate in running its network — not just members — the way anyone can participate in the Bitcoin network. Now Libra is backpedaling to say that anyone who wants to verify transactions on the network will need to gain certain approvals. The exact approvals process is still being worked out.
The Libra association, which was officially formed in October, is still taking shape, Disparte said. The group has added two new members since concluding its charter, including Shopify Inc., which provides e-commerce tools, and now has 22 in total. It also hopes to hire a chief executive officer by the end of the second quarter.
Member companies have contributed financially to pay for the association’s operations, Disparte said, adding that Facebook, the largest member and the project’s founder, is providing less than 10% of this money. Still, that means it’s likely paying more than some of the association’s other 21 members. An association spokesperson declined to explain why.
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—How the coronavirus stimulus package would change gig worker benefits
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—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-04-16--‘Glitches’ delay stimulus check payments for millions of H&R Block, TurboTax customers

Users of some of the nation’s most popular tax services could face delays in receiving their stimulus checks owing to flaws in the system.
The Washington Post reports that millions of people who filed their taxes using H&R Block, TurboTax, Jackson Hewitt, and other services have been unable to get their payments, since the IRS did not have direct deposit information on file.
Many of the people affected are seeing the “Payment Status Not Available” message on the IRS’s Get My Payment tool, which launched Wednesday. Others said they received individual payments, but did not receive the $500 subsidies for their children.
As many as 21 million taxpayers could be affected by the issue, the Post estimates, since the companies involved received taxpayer refunds first, then deducted their fees before passing along the remainder to the client. The IRS and Treasury Department told the Post they were aware of the problem and working on a solution.
TurboTax, in a statement to Fortune, said “The IRS has the appropriate banking information for all TurboTax filers, which can be used by them to distribute stimulus payments. … Any TurboTax customer who selects a refund transfer or a debit card that gets a stimulus payment sent from the IRS to those accounts will receive those stimulus payments without delay or fees.”
The problems come after a fairly rocky first day with the stimulus check payment tool. Some were unable to access the portal, or experienced long wait times, owing to “high demand.” Those delays were showing up again on Thursday morning.
Several users have also complained of receiving notes of “technical difficulties” when trying to enter direct deposit information. And the IRS only allows a limited number of log-ins per day, locking some people out.
People who experience the issues are encouraged to log in the following day.
More personal finance coverage from Fortune:
—What to do if you can’t pay your bills this month
—Stimulus checks are being deposited: How people are spending the money
—Couldn’t track your stimulus check? Errors and long waits plague IRS portal rollout
—What you should know about mortgage forbearance and skipping payments
—Everything you need to know about furloughs—and what they mean for workers
—Freelancers and independent contractors can now apply for SBA Paycheck Protection Program loans. What you need to know
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-04-16--The Coronavirus Economy: How I’m reevaluating risk as an entrepreneur due to the crisis

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Marisa LaValette struck out on her own as an entrepreneur in 2018. With the economy in a strong position, she was confident about her decision to launch a coaching business for women in the health and wellness industries.
Things are different now. LaValette is finding that an economic downturn is a different experience while self-employed. “There are certainly a lot of thoughts going through my mind, now that I find myself a brand-new small-business owner in the midst of our health crisis,” she says. “I felt comfortable with financial uncertainty when the economy was healthy, but now I’m really wishing I had a predictable paycheck on a recurring schedule.”
Fortune spoke with LaValette for a new series, The Coronavirus Economy, to ask about how COVID-19 has affected her plans for the future, and how her job—and outlook—have changed so far because of the crisis. The following Q&A has been condensed and lightly edited for clarity.
Marisa LaValette is the founder of Attune + Align, a career coaching business for women. Emilie Bers
Fortune: What do you do in your work as a women’s wellness coach?
LaValette: In July 2018, I quit my full-time job as a middle school Spanish teacher. It was a great teaching gig at an independent school with benefits and a 401(k), but I chose to give that up and go out on my own. My main income became catering and personal chef work, and now it’s my coaching business, Attune + Align, where I do one-to-one yoga and meditation and mentorship packages with professionals in the fitness and wellness industry. I build websites, including yoga practice videos and YouTube channels, and provide social media and newsletter strategy in a profession where many people don’t have big online presences. I also teach yoga and run my own online yoga membership platform.
How has your work and income changed since the coronavirus crisis began?
When I could no longer teach yoga classes, I realized I would have to rely on my online membership platform as a source of income. That’s where I’m putting my energy and resources right now. But I earn the most from my one-on-one coaching clients. Usually I have one to two coaching clients at a time, but right now I have four. They pay $995 for three hours, or $2,300 for a four-hour coaching package.
Fitness and wellness professionals are feeling the pressure to get their offerings online. These are people who had been interested in the past, but the sense of urgency wasn’t there. Now they need payment platforms and online storefronts. They’re saying, “I should have done this work six months ago—then my website would be ready for this.”
What have those conversations been like with coaching clients who have signed on in recent weeks? Are these wellness professionals concerned about their businesses?
Everyone who I’ve worked with over the past two weeks, there’s been a sense of relief. Even though there are so many unforeseeable challenges ahead, they feel like they are finally ripping off the Band-Aid on this thing that’s been a back-burner project for them. They’re realizing that this is their only way right now, and maybe there is no other alternative at this time.
It sounds like coaching clients are approaching you as they adapt to the new reality of the pandemic. But as this crisis continues, do you expect the flow of clients to continue?
As finances become tighter and tighter, do I think people will continue booking with me? I don’t know. That’s a reflection of the state we’re all in right now.
The uptick in my coaching work—it has replaced lost income from my regular studio classes—but we are in a situation that changes every day. There’s no guarantee that women who are yoga teachers, wellness professionals, or health coaches are still going to book with me a few weeks from now. It’s up in the air.
How are you feeling now about having struck out on your own? How does entrepreneurship in uncertain times compare with self-employment during an economic upswing?
I’m asking myself: “If I had known in 2018 when I planned to launch a brand-new business that our lives would be altered forever 18 months from now, would I still have passed on the next secure rung in my secure career ladder to undertake something new?”
I can say now, I think I still would have made the same decision. I knew it was time for me to try something else.
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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--2020-04-16--How to spend your stimulus check money so it will have the most impact, according to economists

Many Americans woke up this week with an extra $1,200 (or more) in their bank accounts.
In ordinary circumstances, it would likely be a reason to rejoice—but for the majority of Americans everywhere, the past few weeks have meant a complete overhaul of their lives: Nonessential businesses are closed, many employees are working from home, and unemployment is on the rise. Activities that seemed so normal, mundane even, have been put on pause until further notice.
According to a recent report by Moody’s Analytics’ economist Mark Zandi, “The damage to the economy to date has been mostly the result of the supply-side shock from the business shutdowns.” But, the demand-side of the equation (households pulling back on their spending) “is just now hitting.”
If there was one meager bright spot for many Americans adjusting to this temporary new way of life, it’s the recent passage of the CARES Act and a $2.2 trillion stimulus package, that will provide low-and-middle income Americans with either $1,200 or $2,400 (for couples) stimulus checks, plus an additional $500 for every dependent.
But “stimulus” is an interesting word to use here. In fact, for Justin Wolfers, an economist at the University of Michigan, these checks aren’t meant to get consumers into shops or stimulate spending, in the way a normal stimulus package would: they’re intended for survival.
“This recession is different, which means this stimulus package is different,” Wolfers tells Fortune. “This is a recession caused by the government wanting to get people out of work and out of the stores.”
When it comes to thinking about the impact things like stimulus packages and tax cuts have on the economy, those like Deutsche Bank’s senior U.S. economist Brett Ryan point out the “multiplier effect.”
Essentially, the effect is an increase in the total GDP resulting from an injection of spending. Through a ripple effect, Ryan notes that multiples for economic stimulus are anywhere from $0.30 to $0.80 to the dollar—or, in other words, depending on how you spend each dollar of your stimulus check, it can go on to generate another $0.30-$0.80 cents.
With the checks, says Deutsche Bank’s Ryan, the government is “in triage mode for the economy.” That means “There’s not much you can do right now to spur on the economy—it’s all about covering a liquidity gap right now,” he tells Fortune. And first and foremost, these cash grants were intended to “get people by,” he notes—paying for rent, food, and other bills is the top priority.
But obviously, for an economy that has basically ground to a halt, getting closer to $0.80 to the dollar is the goal. And for those who are able, say some economists, one way is to spend your dollars locally.
Get the most bang for your stimulus bucks
Some studies suggest the multiplier effect may be more pronounced when you shop local. One study conducted in 2011 by the Maine Center for Economic Policy found that every $100 spent at locally owned businesses contributed an additional $58 to the local economy, versus $33 if spent at a chain store, even one located near you. The idea being, that local business owner is much more likely to put the proceeds from the transaction back into the local economy again, kicking off a virtuous cycle. And during the coronavirus shutdown, supporting your local businesses could help keep them afloat.
“One of the things that we’ve seen from previous studies in economics looking at the impacts of cash grants generally, is that where they’re having the biggest macroeconomic impact is when you see people spending as they would already be spending on necessities like food and housing and clothes and all of that, but directing your spending toward local businesses,” notes Belinda Archibong, assistant economics professor at Barnard College of Columbia University.
If, in ordinary times, you went out to eat frequently, economists suggest keeping up those normal expenditures, instead getting takeout or donating to local supermarkets, restaurants, and coffee shops.
That’s “where your stimulus money can have the biggest macro spillover effects,” notes Archibong. “[The checks are] not just helping you but your local businesses as well.” When it comes to the multiplier effect, Archibong says economists think of it in two ways: the big pie (GDP), and the distribution of the pie (how much is going to different regions, businesses, individuals, and households).
“If you spend more money locally, then yes, that distribution to local employers and local businesses and local producers will benefit more relative to the big Amazons and the big huge firms, which is a significant positive impact to these local economies,” she says. For her part, Archibong is frequenting a local Korean grocery store in her neighborhood in the Bronx.
Others like Mark Hamrick, chief economic analyst at Bankrate.com, think each person is going to have a different response “to ultimately what they might view as their social responsibility connected to spending,” he tells Fortune. Hamrick has been getting takeout from a locally-owned Italian restaurant “that we want to try to help,” in the D.C. area.
While it may be tempting to spend your extra time at home online shopping on sites like Amazon, some economists suggest that may be doing more harm than good while restrictions remain in place.
In fact, the University of Michigan’s Wolfers points out that Amazon delivery, for example, is already overloaded. “So, no, don’t buy a new couch today,” he advises. Buy that “new couch the day the orders are lifted.”
Deutsche’s Ryan adds that, if you have the means and the visibility, booking travel and airline tickets now (for later in the year) could help companies’ revenue and cash liquidity. “Booking things way in advance would be something to do that kind of helps companies get through,” he says.
But once those restrictions are lifted, will consumer spending return to its former strength?
In short, Wolfers says, “No one has a clue.” Others like Deutsche’s Ryan speculate “You’re going to have the pent up demand,” once restrictions are lifted, but “It takes years, unfortunately, to get [consumer] confidence back to those previous levels once people have experienced such a large shock.”
While economists suggest this round of stimulus likely won’t have too big an impact on the economy on the whole, for now, notes University of Michigan’s Wolfers: “What you should do is spend money to keep your family healthy, happy, eating.”
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—How Fortune 500 companies are utilizing their resources and expertise during the pandemic
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—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
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fortune--2020-04-16--Can video game films finally win over teens and adults?

Hollywood is hitting the reset button on its game plan to get more teens and adults, especially young men, to see its movies. The plan: make better films based on the video games they’re spending hours playing and watching.
There are an estimated 164 million people in the U.S. alone who play video games, according to the Entertainment Software Association (ESA). Among them, 65% play together. Globally, around 500 million watch e-sports tournaments, in which professional gamers compete.
And the numbers behind e-sports alone are staggering, generating more than $1 billion in 2019, according to NewZoo. U.S. video game sales earned $35.4 billion in 2019, up slightly over 2018, according to the ESA and NPD Group.
That’s only expected to grow at a significant clip as Sony and Microsoft are ready to introduce new PlayStation and Xbox game consoles later this year, which should drive more interest in games.
“The continued economic growth and impact of the industry illustrates what we in the industry see every day—more and more people of all ages and backgrounds love playing video games and are celebrating their unparalleled entertainment,” said ESA president and CEO Stanley Pierre-Louis, while announcing last year’s results.
Increasing competition for content
Games make up a growing percentage of the overall global entertainment market, which collected $101 billion in revenues for the first time in history in 2019, according to the Motion Picture Association. Worldwide box office accounted for $42.5 billion, setting a new industry record.
But that was likely peak moviegoing for a while. With theaters closed during the coronavirus pandemic, and audiences getting used to consuming entertainment at home, box office figures will take a big hit in 2020 and beyond.
That will put studios under increased pressure to figure out ways to get gamers back into the multiplex. And fast.
Not surprisingly, studios are currently planning on adapting the video game industry’s biggest franchises into movies, while taking careful heed not to replicate the mistakes of previous stumbles at the box office.
“Hollywood has always tried to find trends, then create filmed content to ride that wave of popularity. But it took a long time for Hollywood to crack the code with superhero movies,” says Paul Dergarabedian, senior film industry analyst for Comscore. “Now we all accept that superhero movies do well and love them.”
There are at least 20 game adaptations in various stages at the major studios, with Sony’s Monster Hunter, starring Milla Jovovich, still set for release in September. That date may change, though, given that the studio has already moved a number of notable titles, including Ghostbusters: Afterlife, to 2021. Jovovich and director Paul W.S. Anderson had already teamed up on the studio’s successful Resident Evil movies, also based on games. The six films grossed over $1 billion at the box office.
A “Monster Hunter” film adaptation, starring Milla Jovovich (left), is currently slated for release in September. Courtesy of Coco Van Oppens/Sony Pictures
Yet the biggest test in courting teens and adults will be next year’s Uncharted, based on Sony’s popular PlayStation action franchise. The film will star current Spider-Man Tom Holland, Mark Wahlberg, and Antonio Banderas—though instead of coming out in March, it won’t be released until Oct. 2021, owing to disruptions caused by the coronavirus pandemic.
Other high-profile projects include Call of Duty, The Division, Just Cause, Metal Gear Solid, Borderlands, Saints Row, Space Invaders, Minecraft, and a reboot of Mortal Kombat.
A tough challenge ahead
But luring audiences back to the multiplex won’t be easy. An increasing number of gamers are glued to their screens, and not necessarily movie screens.
Box office in the U.S. and Canada fell 4% to $11.4 billion in 2019, down from a record $11.9 billion in 2018, according to the MPA. Admissions fell 5% to 1.2 billion. Movie theaters have largely been losing frequent moviegoers ages 25 to 60-plus since 2017, while numbers for those ages 12 to 24 have remained relatively flat, the MPA says. That demo represents 26% of frequent ticket buyers.
Meanwhile, in 2019, the digital entertainment market grew 18% to $21 billion, according to the MPA. It was up around 29% across the rest of the world, generating $28 billion.
With some titles requiring 40 to 50 hours of play, “gamers are already living their own movie in real time as they’re playing these immersive stories,” Dergarabedian says. “It’s hard to compete with something like that. But sometimes you can win people over with a really great movie.”
Past failures
Yet for every successful Sonic: The Hedgehog that studios cheer about, there’s an Assassin’s Creed—star-studded disappointments that didn’t win over the loyal fans who love the games they’re based on, and resulted in pricey write-downs for their studios.
Those have included Disney’s Jake Gyllenhaal vehicle Prince of Persia; Michael Fassbender’s Assassin’s Creed; Dwayne Johnson’s Doom and Rampage; fantasy epic Warcraft; Fast and the Furious hopeful Need for Speed; and more recently another try at Tomb Raider, with Alicia Vikander replacing Angelina Jolie as the gun-toting adventurer Lara Croft. The trend stretches all the way back to 1993’s Super Mario Bros.
“The quality of the video game movie has been very inconsistent, and thus the genre has been painted with a broad brush of condescension and marginalization,” Dergarabedian says. “There hasn’t been a combination of critical raves and box office successes.”
Still, “every time there’s an unexpected success, it gives everyone new hope for a genre,” he adds. “But it can’t be just one every five or 10 years.”
Dergarabedian points to the string of successes Marvel has enjoyed with its franchises and cinematic universe. “Once you get that kind of consistency that’s how you create a new image of a genre in the minds of moviegoers.”
Powered by PlayStation
Empowered by its popular video game console, Sony is making a serious effort to win over gamers.
It launched PlayStation Productions in 2019 to adapt its catalog of more than 100 exclusive games into movies and TV shows, which include God of War, Ratchet & Clank, Crash Bandicoot , and Spyro the Dragon.
Sony, in particular, is hungry for new franchises, after struggling to reboot Men in Black, Charlie’s Angels , and an all-female Ghostbusters. It finally found success with a third Bad Boys, in January.
Ironically, the studio breathed new life into Jumanji, whose plot revolves around its characters’ being sucked into a video game, even though the films aren’t based on one.
Cracking the code
By putting gamers in control of game-to-film adaptations, Sony thinks it can crack the code to connect with the community it’s trying to attract.
But for some projects, TV may be the better answer.
Sony’s The Last of Us, an action-adventure story of a smuggler who escorts a teenage girl across a post-pandemic United States, has engrossed players with hours of game play, and its producers realized the breadth of the story and situations may be better suited for the small screen.
The film version is now set up as a series at HBO, under the guidance of the creators of HBO’s critically acclaimed miniseries Chernobyl.
Similarly, a big-budget live-action adaptation of Microsoft’s Xbox hit Halo is set up at Showtime.
Taking the time
Hollywood hasn’t necessarily been in a hurry to adapt games into films.
Uncharted, which debuted as a game in 2007, has been in development at Sony since 2009, and just signed on its seventh director, Ruben Fleischer, who was behind the studio’s Spider-Man spinoff Venom. The Uncharted games ended their run with sequels in 2017.
Production on the film was supposed to begin in Berlin in April, but has been delayed till at least June as a result of the pandemic. Other projects are also likely to be moved as studios reshuffle their release schedules and pause start dates.
The “Uncharted” film adaptation, which is seeing more delays as a result of the pandemic, is now expected to hit theaters in October 2021. Courtesy of PlayStation
Halo, as a TV show, has been in the works in some form for six years, with the first nine episodes set to debut in 2021. It was set up as a movie before that.
If Sonic proved anything, it’s that studios may be going after the wrong audience with its game adaptations.
Most of the game-to-film projects target males, who make up 54% of gamers in the U.S., according to the ESA. The average player is 32, with 83% of millennial male gamers focused on action games. That would be a perfect audience for Call of Duty films.
But Sonic’s success is largely attributed to families, who represented 49% of the audience on opening weekend, making it the biggest debut for a video game film ever. Sonic has earned $300 million worldwide to date.
Kids and their parents also turned out for last year’s Pokémon Detective Pikachu, grossing $433 million worldwide, and the first Angry Birds movie, based on the popular mobile game. But not so much for last year’s Angry Birds sequel, which earned $155 million worldwide, compared with its predecessor’s $352 million.
Looking ahead, Sony may want to focus more on its kid-friendly games like Ratchet & Clank, Crash Bandicoot, and Spyro the Dragon for some quick wins with moviegoers. Like Sonic, all have a built-in following after years of sequels and reboots, and would attract younger audiences, thanks to their animated wisecracking animal characters.
The other option is to limit the budget and replicate the John Wick model, going after younger male audiences. Combined, the three films in the series have earned more than $580 million worldwide. The first film cost $20 million to make.
“Authenticity is what’s needed” to win over gamers, Dergarabedian says. “People don’t like their video games, they love their video games. You can’t mess around with that. You need the gamers on board so they tell people to see it. They’re the influencers. With Sonic, the gamers spoke, and that paid off.”
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—Tigertail director Alan Yang on making the past not “a memory, but a beautiful dream”
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fortune--2020-04-16--What refunds are due to you for concerts and events? Here’s how industries are handling things

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The coronavirus pandemic has devastated the live-events business. Concerts, ball games, and large social gatherings of any sort are being canceled and postponed at a rapid pace.
That’s more than a disruption of our social lives. For a lot of people, that’s hundreds of dollars spent that could be very useful now, especially as unemployment spikes. But getting that money back may not be as easy as you expect, depending on where you bought your ticket.
The refund and return policies of different businesses vary widely. Here’s a look at how several companies are handling things:
Ticketmaster
Ticketmaster, the nation’s largest ticket seller, is keeping a running list of canceled and rescheduled events in your area on its home page. Should the event be canceled, the company will automatically refund your money. In cases where a concert or event is postponed or rescheduled, and it doesn’t work with your schedule, some organizers are offering refunds via Ticketmaster. That will appear via a refund link on your Ticketmaster account.
Eventbrite
If you bought tickets on Eventbrite, you’ll need to proactively request the refund to any event canceled between March 15 and May 15. That process is a bit more arduous, forcing you to first contact the event organizer, then (if they decline the refund) filling out a separate form on Eventbrite. The company says you could then wait up to eight weeks to hear if your refund was approved. If so, you’ll see the funds in your account within five to seven days.
StubHub
At StubHub, people who purchased tickets for canceled events will receive a coupon worth 120% of their original order to their StubHub account. Ticket holders to postponed events are in more of a limbo state and are encouraged to hang on to their tickets. If an event is rescheduled, and you can’t attend the new date, you’re largely stuck—short of reselling your tickets through the service—which may or may not fetch what you paid for them pre-pandemic.
If you sold tickets to a canceled event on StubHub, the company will charge your credit card to reverse the transaction and have you contact the original ticket company for a refund.
TickPick
TickPick, like StubHub, is offering credits of 110% of order prices for cancelled events. (Refunds are also available.) It is not, however, offering refunds on rescheduled or postponed events.
SeatGeek
SeatGeek has a Buyer’s Guarantee policy, which will refund customers (though they also have the option of receiving a promo code, which is good for 12 months). Holders of tickets to postponed events will be contacted when a new date is set. In either case, the company says, the response will be automatic, and customers shouldn’t have to initiate any action.
TicketIQ
TicketIQ is also offering refunds for canceled events, processing and crediting those within a week or two of the cancellation date. It’s offering to work with people if a rescheduled date does not fit their plans.
Professional Sports
The four major sports leagues, so far, are not issuing refunds to any games, even though those have been postponed indefinitely.
NFL
While it’s too early to say if the COVID-19 pandemic will affect the 2020–21 NFL season, the league is already taking steps to keep fans happy. Many teams are already postponing current installment payment dates for season tickets. And in a memo to team owners, the league said if games are canceled, played without fans, or played with a smaller number of fans in attendance, season ticket holders would get a prorated refund or credit for future purchases.
NBA
The NBA says “all tickets purchased for a postponed game will be honored when the game is rescheduled.” And fans will have the option to receive a credit for an alternate game or a game next season.
MLB
The league has avoided talking about refunds, only saying it will “keep fans updated on decisions regarding plans for the 2020 schedule,” and adds it remains committed to playing as many games as possible when the season begins.
NHL
After extending self-quarantine guidelines for players until April 14, the league says it is “exploring all options” for a resumption of the season, including playing games without fans or at neutral sites. The NHL, however, did not address how it would compensate fans should it take those steps.
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fortune--2020-04-16--U.S. small business aid is marred by delays and confusion. German businesses have it ‘in my bank acc

U.S. small business aid is marred by delays and confusion. German businesses have it ‘in my bank account the next day’

Like thousands of other small-business owners in Germany, Andrea Mayr was forced to temporarily shutter her hair and beauty salon in the middle of March.
Popular with film-production crews as well as individual clients, Maske Berlin—10 minutes’ stroll from the famed KaDeWe department store—may be able to reopen in early May, according to new guidelines issued by Angela Merkel’s government on Wednesday. But that’s still seven weeks of closed doors.
To help Maske Berlin weather the coronavirus shutdown, Mayr has been able to tap into multiple official programs. Her staff have been furloughed under a scheme called Kurzarbeit (“short time work”), in which the government pays at least 60% of their wages, and Mayr also requested a liquidity grant via a program being administered by each German state’s development bank—in her case, Investitionsbank Berlin.
“I was, like everyone, on the website of Investitionsbank Berlin, and because I have more than five employees they gave me €15,000 ($16,300),” Mayr says. “I was in the waiting line for four days, but then when I filled out the form it was in my bank account the next day, which was unbelievable.”
Mayr’s experience is typical in Germany, where federal and state administrations are battling COVID-19’s economic onslaught with a range of grants and emergency loans—what she tapped into was a Berlin program worth €1.3 billion in total.
But business owners (and their workers) in many other countries can only dream of such efficiency.
In Italy, delays caused by bureaucracy and understaffing may for many businesses push back the disbursement of state-guaranteed loans as far as June or July. In the U.K., just one in five companies applying for government-backed loans have been successful, almost a month after the relevant scheme’s launch. And in the U.S., the Small Business Administration’s rollout of multiple business-rescue loans has been fraught with delays and confusion.
So, what’s different in Germany?
For one thing, the schemes being used to keep businesses afloat have been around for a good while—though their conditions have in some cases been loosened, to adapt to the current situation.
The Kurzarbeit system for maintaining salaries dates back to 1950s and was credited with helping Germany emerge from the financial crisis relatively unscathed. And, as in the 2008 financial crisis, authorities are using loan programs at the federal state-owned development bank, Kreditanstalt für Wiederaufbau (KfW), to funnel credit to the larger businesses that need it to survive. Economists credit these schemes with keeping the German unemployment rate from spiking during the global financial crisis, as happened in neighboring countries.
“What we hear from our colleagues in other European countries is that all these countries are working on respective programs for getting state aid in place,” says Ulrich Klockenbrink, a counsel at the Hamburg office of corporate law firm Latham & Watkins. “Germany started with these programs very early and very proactively.”
According to the latest figures from KfW, the bank has doled out nearly €23.6 billion since March 23 in coronavirus loans to more than 10,600 businesses, who apply through commercial banks.
“KfW can act as soon as the application arrives via a shared digital platform,” says a KfW spokesperson in an emailed statement. “Applications up to €3 million will be approved immediately without a further check (which can take just a few minutes in the best case, at maximum one day). Those between $3 million and $10 million will be checked on an accelerated ‘fast track’ procedure including only the basic data (taking about two to three days) and only larger applications above €10 million are checked individually, taking an estimated time of about seven working days.”
KfW does not disclose the rate of approvals—it says the disparity in approval times, depending on the size of the loan, would create distortion effects.
However, despite the plethora of oven-ready programs that the German federal and state governments have been able to urgently deploy, money does not—as Klockenbrink puts it—”fall from the sky.”
Particularly in the case of large enterprises, respective creditor agreements need to be negotiated on an individual basis. “These creditor agreements have to fit into the financial structure of the supported business,” says the lawyer. “The state generally expects to have senior status, at least in terms of maturity…There are of course exceptions, and this has to be negotiated, but this is the general approach.”
“This makes sense from the taxpayer’s perspective,” says Klockenbrink.
The German Taxpayers’ Federation—an organization that campaigns for low taxes and a lean state—claims “there are initial indications that funding has been misused.” The group says in a statement that, “where the grants were issued very quickly, [the applications] must be checked retrospectively” by tax officials.
From Mayr’s perspective, the grant Maske Berlin received so swiftly helped her to mentally deal with the initial shock of the coronavirus restrictions—but she anticipates having to make further financial plans.
“We are closed for seven weeks,” she says. “In the end, I will come out of the coronavirus crisis with debt.”
Correction and update, April 16, 2020: This post has been updated to correct the translation of the German word Kurzarbeit as “short time work.”
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