A report released Monday by international consulting firm McKinsey and Co. showed that as many as 59 million European jobs could be at risk due to the coronavirus, about 27% of the continent’s workforce between the European Union and the United Kingdom.
“With economic activity in many sectors having ground to a near standstill, many businesses are struggling to uphold their financial obligations,” the report says. “And with uncertainty looming large, many companies are considering adjustments in their workforce. This could potentially put millions of jobs at risk through reductions in hours or pay, temporary furloughs, or permanent layoffs.”
The study said the workers most affected by the layoffs are likely to be in fields such as food service, sales, retail, accommodations and the arts.
“Losing those jobs would not only be a tragedy on an individual level, but would also be very painful from an economic perspective,” the report said, adding that the job losses could potentially exacerbate “existing social inequalities.”
The consultancy advises European companies to segment workforces and invest in expanding remote work opportunities while urging policymakers to take “swift and forceful action” to blunt the economic impact of the virus.
Fitch Ratings said on Monday that it expects “European GDP to contract by more than 4% in 2020.”
Forbes reported Sunday that British bank Barclays has forecasted a 5.5% contraction for the eurozone compared to a 6.4% contraction for the U.S.
Europe was once the epicenter of the global coronavirus outbreak, with major economies such as Germany, France, Spain and Italy issuing strict shutdown orders to keep citizens inside.
Some countries are now easing the measures, with Germany reopening small shops, car dealerships and bicycle stores on Monday. Last week, Italy reopened bookstores and shops that sell clothes for babies and young children, while Austria reopened small shops, garden centers and public parks.
As of 11:40 a.m. ET, there are 761,964 coronavirus cases and 35,314 deaths.