Advisors frantically aid companies to avoid layoffs
03 April 2020
- Companies scramble to apply for SBA loans
- VC and PE-backed companies seek counsel on CARES Act eligibility
- Speed is key in loan applications
San Francisco-based corporate travel company TripActions laid off 300 employees last week, even after securing USD 500m in debt financing in late February to launch a new payment product.
Everlane, the popular San Francisco-based direct-to-consumer apparel company, also took actions to reduce expenses, including cutting salaries and instituting layoffs, its CEO Michael Preysman said in a public release.
Companies across the US are facing similar decisions. M&A, legal and communications advisors that spoke with this news service are actively helping their clients navigate this new landscape.
Layoffs are naturally seen as a last resort, particularly in such an uncertain time and with a health crisis consuming the world, executives and corporate advisors said.
Tim Long, a shareholder with Greenberg Traurig who represents employers, said anyone in his field should be “out of their minds busy trying to keep up with the changes in law that are happening by the hour.”
“One general trend is no one is looking to lay people off,” said Long. “Some clients have had to, but no one wants to.”
Companies want “to do right by employees” and also wish to avoid having to find new talent when demand spikes, Long said. Some options available to companies include tapping federal aid, exercising furloughs, reducing schedules and reducing compensation for all, Long said.
For employers with staff paid on commission, in some cases commissions have been enhanced, thus offering more carrots to incentivize them to make sales, Long said.
