July 3, 2020
AliExpress WW
Kevin O'Leary, Shark Tank investor: Many companies use pandemic as a cloak to cut jobs

Kevin O’Leary, Shark Tank investor: Many companies use pandemic as a cloak to cut jobs

AliExpress WW

Many companies are using the “pandemic as a cloak” to cut jobs that they wanted to cut before the coronavirus outbreak, Shark in the Aquarium investor Kevin O’Leary told CNBC on Wednesday.

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“Their work will never return,” said O’Leary at Squawk Box. “It’s great for making money at S&P. Not very good for working.”

O’Leary said mandatory closures, in particular – introduced by state and local governments to help slow down the distribution of Covid-19 – could be used by enterprises as cover to reduce the number of employees in the future. “They still wanted to do it, and they do it under cover:” Gee, I can’t open it, so I’m just going to do it. ”

Tens of millions of Americans have applied for unemployment insurance as the coronavirus pandemic has begun to intensify, but a significant proportion of those who file lawsuits say they think their layoffs will be temporary. Existed 15.3 million unemployed for a layoff in the May report on jobs, according to the Department of Labor, this is 2.7 million less than in the previous month.

However, permanent job losses grew by 295,000 in may to 2.3 million. In general, the US unemployment rate in May fell to 13.3% from 14.7% after an unexpected increase of 2.5 million jobs, which served as a positive indicator of economic recovery after the Covid-19 crisis.

“At least 15% -20% of high-rise jobs will remain remote.”

O’Leary said he also believes that the coronavirus pandemic will lead to long-term changes in commercial real estate, in part due to the wider adoption of telework.

“As a demand factor, I think that at least 15% -20% of the jobs in high-rise buildings will remain remote, because compliance, accounting and logistics, you do not need these people in the office,” he said.

These trends are ultimately good news for the stock market, as they will save the company money, said O’Leary, who is known as “Mr. Wonderful” in “Shark Tank”.

“I’m very optimistic because I simply multiply what I see in front of me in my own portfolio in terms of increasing margins, and I say to myself:“ In two years I bet that S & P has increased its margin by 5%, or 6%, ”said the Canadian businessman.

O’Leary says many companies may not open stores in lower-level malls

For example, O’Leary said some of his Shark Tank companies are going to significantly reduce their retail sales in the future. He said that this will mainly affect locations in lower shopping facilities.

“That’s the thing, and I think the market seems to be talking about it, you can lose half of your sales, half that represented your retail business, and if you can attract this customer directly, you will do the same. cash flow, because now you get 100% margin instead of 50%, ”he said.

O’Leary, who is also chairman of ETF O’Shares, said he believes this digitization trend explains why companies like Amazon, DocuSign and Facebook saw their stocks rise during the pandemic. “These are not crazy ratings. They are the engine of transition, and therefore the market is lively, ”he said.

Disclosure: CNBC holds exclusive rights to connect to the network. SHark Tank, “on which Kevin O’Leary is co-host.

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