Layoffs 2020: Norwegian Air, SXSW 2020 Lay Off Employees Due To Coronavirus

The cancellation of this year's highly-anticipated SXSW film, interactive media, music festivals and conferences in Austin, Texas to prevent the transmission of COVID-19 not only disappointed tens of thousands of people.

It also led to SXSW’s parent company, SXSW LLC, to fire a third of its 175 regular employees. The company said it “has been rigorously reviewing our operations, and we are in the unimaginable position of reducing our workforce." It said the cancellation of SXSW will cost it tens of millions of dollars in lost revenue.

“We are planning for the future and this was a necessary, but heartbreaking, step," the company claimed.

Apart from the economic pain dealt employees, the cancellation of the world-famous event also blasted the hopes of many small businesses in the city that have come to depend on SXSW for added sales boosts. SXSW draws more than 100,000 more visitors to Austin annually, creating a mini but potent enough economic boom during its roughly week-long duration. In 2017, SXSW lasted for 10 days. The interactive track lasted five days, music seven days, and film nine days.

Some see the cancellation of SXSW as an overreaction given there's not a single confirmed case of the coronavirus in Austin. The U.S. Centers for Disease Control and Prevention (CDC) reports 16 confirmed cases of COVID-19 in Texas as of Tuesday.

Austin health officials are currently testing people for COVID-19 and confirm there have been no documented cases of person-to-person transmission in the Central Texas area. The Texas Department of State Health Services said there are a dozen confirmed cases of COVID-19 in the state, most of which are in the Houston area. This estimate was made on Monday, however.

Also because of COVID-19, Norwegian Air Shuttle ASA, or Norwegian Air, the third largest low-cost carrier in Europe and the largest airline in Scandinavia, will either fire or temporarily lay off an undetermined number of employees and cut more than 3,000 flights. The 3,000 flights will be cut between mid-March and mid-June and correspond to around 15% of the company's capacity.

“This is a critical time for the aviation industry, including us at Norwegian,” said CEO Jacob Schram. “We encourage the authorities to immediately implement measures to imminently reduce the financial burden on airlines in order to protect crucial infrastructure and jobs.”

Last week, Norwegian dismissed its initial 2020 outlook due to the severe effects of COVID-19 on air travel. It has lost 70% of its market value this year and expects more pain. In Norway, passenger air traffic fell by 5% at the end of February after the confirmation on February 26 of the country’s first COVID-19 case.

“It will affect the entire network and more details will be shared as soon as they are ready to be implemented,” said Norwegian.