Starbucks and office-sharing company WeWork are shutting locations in China, while Facebook, Nissan Motor and other companies enact measures to shield employees in areas hardest hit by a deadly viral outbreak.
WeWork is temporarily closing 55 offices across China and encouraging employees to work from home or in private rooms, it said in a statement Tuesday.
Facebook employees based in China, and those who recently returned from trips to the country, are also being told to work from home, people familiar with the matter said.
Here is a summary of how some of the biggest companies are responding, as well as early analysts’ estimates of the impact:
Travel limits, which went into effect Monday, halt non-essential travel to China by all Facebook employees, said the person, adding that if workers have to visit the country, they will need specific approval. The company declined to comment.
Carnival’s Costa Cruises brand, working with the Chinese government, decided to suspend nine voyages leaving China from January 25th to February 4th.
In a separate statement, Royal Caribbean said it suspended January 27th and January 31st sailings.
Both pledged to provide refunds to customers. China is a small but growing market for American cruise companies, and analysts project further cancellations could hurt earnings.
Of Starbucks, McDonald’s and Domino’s Pizza, Starbucks is the most exposed to the outbreak, as measured by percentage of worldwide revenue and operating income, according to Guggenheim analyst Matthew DiFrisco.
“China represents a high growth region and a meaningful contributor to the longer-term global revenue growth goals for all three companies,” DiFrisco said in a note. The Seattle-based chain has about 4,100 cafes in China.
On Tesla, about 8 million cars were sold last year in the roughly 40 Chinese cities that have 10 or more diagnosed coronavirus cases, or 36.8 per cent of total retail volumes in the country, Bernstein analysts estimate.
Those cities accounted for 82.5 per cent of Tesla’s retail volumes, and 68 per cent of NIO’s, the analysts wrote in a note. “The latter looks especially vulnerable to a prolonged slump in EV sales,” they said.
Nissan plans to evacuate most of its expatriates and their family members from Wuhan using chartered plane dispatched by the Japanese government, a company spokeswoman wrote in an email.
Honda Motor will evacuate from Wuhan about 30 Japanese workers and family using a government charter aircraft, family members and employees visiting on business trips, Teruhiko Tatebe, a Tokyo-based spokesman, said by phone.
The carmaker has informed the Japanese government that it wishes to utilize a charter jet to evacuate Japanese citizens. A handful of staff needed to maintain local operations will remain in the city.
The moves by companies highlight Wuhan’s importance as a manufacturing, shipping and business hub.
The central Chinese city has more than 500 factories and other facilities, placing it 13th among 2,000 Chinese cities in Bloomberg’s supply chain database. It’s the capital of Hubei province, which has 1,016 such facilities, making it seventh of 32 such jurisdictions.
McDonald’s, which had about 3,000 stores in China at the end of 2018, temporarily closed locations across five cities of the Hubei province due to the virus, including Wuhan.
The Chicago-based company is taking extra preventative measures in the rest of the country, including taking the temperature of workers upon arrival and giving out hand sanitizers to diners.
Walt Disney said it would close its Disneyland resort in Shanghai effective January 25th. The company is offering refunds to guests who bought theme park tickets or reserved rooms in its hotels.
“We will continue to carefully monitor the situation and be in close contact with the local government, and we will announce the reopening date upon confirmation,” it said in a statement. – Bloomberg
