A prolonged global recession due to COVID-19 pandemic, high unemployment, another outbreak of an infectious disease and increased protectionism are among the biggest near-term worries for companies around the world, a new study showed on Tuesday.
The study conducted by the World Economic Forum (WEF) also flagged that the world is not ready for the knock-on effect of far-reaching environmental, societal and technological risks, but a "green recovery" and more resilient, cohesive, inclusive and equal societies can emerge if leaders act now.
"Economic distress and social discontent will rise over the next 18 months unless world leaders, businesses and policy-makers work together to manage the fallout of the pandemic," according to the report.
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As economies restart, there is an opportunity to embed greater societal equality and sustainability into the recovery, which would unleash a new era of prosperity, said Geneva-based WEF, which describes itself as an international organisation for public-private cooperation.
The study, titled 'COVID-19 Risks Outlook: A Preliminary Mapping and Its Implications', has been conducted in partnership with Marsh & McLennan and Zurich Insurance Group. It taps into views of nearly 350 senior risk professionals who were asked to look at the next 18 months and rank their biggest concerns in terms of likelihood and impact for the world and for business.
The immediate economic fallout from COVID-19 dominates companies' risk perceptions and these range from a prolonged recession to the weakening fiscal position of major economies, tighter restrictions on the cross-border movement of goods and people, and the collapse of a major emerging market.
The report also calls on leaders to act now against an avalanche of future systemic shocks such as the climate crisis, geopolitical turbulence, rising inequality, strains on people's mental health, gaps in technology governance and health systems under continued pressure.
"These longer-term risks will have serious and far-reaching implications for societies, the environment and the governance of breakthrough technologies," the WEF said.
As per the study, two-thirds of respondents identified a "prolonged global recession" as a top concern for business. Besides, one-half identified bankruptcies and industry consolidation, failure of industries to recover and a disruption of supply chains as crucial worries.
With the accelerated digitisation of the economy in the midst of the pandemic, cyber attacks and data fraud are also major threats, according to one-half of the respondents, while breakdown of IT infrastructure and networks is also a top concern.
Geopolitical disruptions and tighter restrictions on the movement of people and goods are also high on the worry list.
A second report from WEF, 'Challenges and Opportunities in the Post-COVID-19 World', which was also published on Tuesday, draws on experiences and insights of thought leaders, scientists and researchers to outline emerging opportunities to build a more prosperous, equitable and sustainable world.
WEF's Managing Director Saadia Zahidi said the COVID-19 crisis has devastated lives and livelihoods while triggering an economic crisis with far-reaching implications and revealing the inadequacies of the past.
"As well as managing the immediate impact of the pandemic, leaders must work with each other and with all sectors of society to tackle emerging known risks and build resilience against the unknown. We now have a unique opportunity to use this crisis to do things differently and build back better economies that are more sustainable, resilient and inclusive," she said.
(Edited by Javed Gaihlot)
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Original Source: yourstory.com
Ride-hailing giant Ola on Wednesday said it will lay off 1,400 employees due to the worsening coronavirus pandemic, even after its senior management had already taken significant salary cuts to avoid such a situation.
The company did not specify which positions or departments would be culled, but said it would be the last time any COVID-19-related cuts would be made.
"Ever since my last email to you six weeks ago, I had hoped to write again soon in better times. Unfortunately, the COVID crisis continues to unfold all around us causing unprecedented economic and social destruction. It has also become evident that the coronavirus will not be eliminated any time soon. We will rather have to learn to live with the virus and resultant implications," wrote Bhavish Aggarwal, Co-Founder and CEO of Ola, in an email to employees.
Ola's revenue has fallen nearly 95 percent over the last two months due to the lockdown, the company said, prompting it to look for ways to conserve cash aggressively. The company was allowed to resume its services in 160 cities on Tuesday.
Still, the outlook for the business is very uncertain and unclear, said Bhavish.
"It is going to take a long time for people to go out and about like before. With more companies preferring to have a large number of employees work from home, air travel limited to essential trips, and vacations being put off for better times, the impact of this crisis is definitely going to be long-drawn for us."
The world is not going to revert to the pre-COVID era anytime soon," he further wrote.
Detailing the lay off process, the company said its human resources team will have one-on-one conversations with each affected employee, and they will be walked through the various ways in which Ola will continue to support them.
Each employee will receive a minimum financial payout of three months of their fixed salary, irrespective of the notice periods. Those who have spent more time at the company will be eligible for higher payouts, depending on their tenure.
ESOPs will vest forward to the closest quarter for employees who have worked with the company for over a year. For others, the company said it will enable pro-rated vesting for the period of time spent at Ola.
Other support measures include extending the company's insurance policy cover for affected employees up to December 31, 2020, medical insurance for the departing employees' parents, access to health and emotional wellness services, as well as career support through placements.
"These decisions are not reflective of anyone’s performance and are purely a function of the uncontrollable circumstances that we have been faced with," said Bhavish.
"This will be a one time exercise and will be complete by the end of this week for our India Mobility business, and by the end of next week for Ola foods and Ola Financial Services. No more COVID-related cuts will be done after this exercise," he emphasized.
Over the two months, beginning March when the lockdown was announced, the company had launched several initiatives to support its driver partners. These included rental waivers for over 30,000 leasing drivers which helped them save nearly Rs 25,000 per month, offering zero-interest loans to support household expenses, and extending COVID-19 insurance to the drivers and their spouses.
The team also set up a Drive the Driver Fund, where over a million kilograms of essential supplies were distributed to drivers and their families, and over 500 medical emergencies – including pregnancies, dialysis, cancer-care, and neonatal cases – had been financially supported.
"As economic activity returns, so will the need for mobility, but the paradigms will have changed. This crisis is accelerating macro trends of digital commerce and clean mobility, and our businesses are well-positioned to leverage these macro trends well. I'm filled with a lot of emotion and sadness as I write this email, but also with strong hope and resolve to rebuild our business, and create the future that we envision, together," concluded Bhavish.
How has the coronavirus outbreak disrupted your life? And how are you dealing with it? Write to us or send us a video with subject line 'Coronavirus Disruption' to [email protected]
Original Source: yourstory.com
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