Australia’s #labour market recovery appears to have stalled. Payroll #jobs increased by just 0.1% over the fortnight ending 13 June after averaging 0.9% growth over the previous three fortnights. #ausecon @cfbirch pic.twitter.com/Bbcbk9zv8T
— ANZ_Research (@ANZ_Research) June 30, 2020
V-shaped recovery. Not. Here’s the problem, via the AFR:
Virgin Australia could slash up to half of its workforce to rebuild its crisis-hit operations, a former chief economist of Qantas said, as Regional Express tries to muscle into the lucrative “golden triangle” routes between Sydney, Melbourne and Brisbane.
The projection comes as Virgin’s management team prepares to meet this week with its likely new owners from US private equity group Bain Capital to discuss the size and scope of the relaunched airline.
Virgin, which employs 10,000 staff, may even sack 5000 in the wake of its sale. That is the opinion of Tony Webber, who was chief economist at Qantas from 2007 to 2011, and the estimate relies on how much of the airline Bain maintains.
Qantas plans to return to 70% of domestic capacity, as roughly half its previous staff levels though that includes international which will still largely be shut down. Virgin will have to sack a lot of people one way or another.
What is more worrying is that this is likely only the leading edge of a broader second round of job losses. Many large businesses will have furloughed workers to be part of the National Team, and have latent headcounts far above the demands of the new virus order.
As we emerge haltingly form the virus those heads are going to roll.
I can see this labour market reset rolling deep into 2021.
