T AT&T Inc

By Lauren Weber 

Among the hard truths the new coronavirus is revealing is this: A pandemic can be a good time to work for a big company.

As many small businesses operating with little cushion are laying off employees, dozens of large companies so far have extended pay and benefits to workers whose livelihoods are affected by the virus.

AT&T Inc. is offering up to 80 hours of paid time off to employees whose children are suddenly at home and need supervision. JPMorgan Chase & Co. is sending $1,000 bonuses to certain branch and operations employees who can't work from home, to help allay costs like child care and transportation. Saks Fifth Avenue is closing its stores for two weeks and will pay employees for their scheduled shifts. Many other big companies are extending similar assistance.

Apple Inc. has closed stores outside of greater China indefinitely, saying hourly workers will continue to be paid. Facebook Inc. said it would give full-time employees an additional $1,000 in their next paycheck and would continue to send its legion of contractors, including content moderators, home with pay.

There are exceptions. Already, companies hit hard by travel restrictions and anxieties, like airlines and hotels, have instituted unpaid leaves and furloughs. On Saturday, Marriott International Inc. confirmed to The Wall Street Journal that the company was furloughing about two-thirds of its 4,000 corporate employees at the company's Bethesda, Md., headquarters and furloughing about two-thirds of its corporate staff abroad.

The corporate furloughs follow the hotel giant's decision to begin furloughing hotel staff.

But generally, thus far, large companies' resilience has contrasted with the cut shifts and layoffs at many small companies, which often operate with little margin for a crisis. Large companies typically have more means -- diverse assets, cash, longtime relationships with investors and banks -- to weather turmoil. They are also acting with an eye on the court of public opinion.

Just over half -- 54% -- of employers say they will continue for some period of time to pay hourly staff whose workplaces shut down due to the virus, and 51% will pay people who stay home because of cold and flu symptoms, according to a survey of 805 large companies polled last week by consulting firm Willis Towers Watson. About one third say they will pay employees who need to stay home because of their children's school and day-care closures.

Business leaders today are balancing their wish to be perceived as good corporate citizens and retain connections with employees for a time of economic rebound, and grim business projections from the coronavirus. A misstep in either direction risks goodwill or survival.

The pandemic in some ways is shaping up to be a natural experiment in stakeholder capitalism, the vision laid out last August by the Business Roundtable. The association, composed of chief executives of some of the nation's largest companies, adopted a definition of corporate purpose that promotes "an economy that serves all Americans," jettisoning its prior focus on shareholders above all others.

The statement of purpose, signed by more than 180 CEOs, specifically mentions employees as stakeholders.

Joshua Bolten, the president and CEO of the Business Roundtable, in an interview Sunday said in the long term, stakeholders' interests are congruent. If employees, customers, suppliers and communities can't be supported, "there will be no business for shareholders to own when we come out of this crisis," he said.

But even very large enterprises have limits, he added. "The decisions some of them are currently making actually have to do with the survival of the enterprise."

At Waste Management, the big trash and recycling collector, chief executive Jim Fish told employees the company will continue to pay them for 40-hour workweeks regardless of whether their hours are cut or services are curtailed.

"What I did not want is to have any of our 45,000 teammates worry about how am I going to pay my rent or feed my family," he said in an interview Friday morning. "We know it will be costly for the company but that doesn't matter."

Mr. Fish said he made the decision a couple of weeks ago and ran it by his senior leadership team and board of directors. He said the policy will continue indefinitely.

"I sure hope this thing doesn't go on for two years. But honestly if it did, I'd tell you that 40-hour guarantee becomes increasingly valuable the farther out you go."

Replacing people is expensive, running up to $20,000 when a Waste Management employee quits. "So purely from an economic standpoint, I'd still tell you it's the right thing to do," he said.

A few days ago, he also sent an email to 11 CEOs he knows, asking them to do something to help small businesses, an important customer base for large enterprises. He said several had already responded with enthusiastic agreement. For its part, Waste Management is already working with small and medium-size customers to alter payment terms and extend service.

Many companies extending pay or benefits are putting endpoints in place, raising questions of whether the measures will outlast the virus's impact. According to the Willis Towers Watson survey, the typical organization guaranteeing pay through the disruptions is capping compensation at 14 days, which means another reckoning point is coming at the end of March.

At first, extending pay and sick leave was the right business strategy, "particularly because it bought you a bunch of goodwill," said Nicholas Bloom, an economist at Stanford University's Graduate School of Business. "As we go further into March, CEOs are facing a grimmer reality."

Even big companies, he said, may face limits as to what they can or are willing to provide.

"I don't think anyone wants to be the first to slash employees," Mr. Bloom said. "But if five to 10 high-profile companies lay off workers, it may be like a dam bursting. If bad news continues to pour out, there will be a rush to the exit as everyone dumps workers."

Write to Lauren Weber at lauren.weber@wsj.com

(END) Dow Jones Newswires

March 22, 2020 12:33 ET (16:33 GMT)

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