How the COVID-19 Pandemic Is Bringing out the Moral Best, and Worst, in Businesses

In times of crisis businesses show their true colours. In a world filled with companies spouting corporate social responsibility (CSR) and purpose-driven strategies, the pandemic has put these corporate values to the test, highlighting the gap between moral and immoral businesses.

As the ongoing COVID-19 outbreak has made blatantly clear, these ethical claims from corporations are often no more than hollow sales pitches. Beauty retail giant Sephora fired over 3,000 employees via mass group conference call this past week. The staff were given no advanced notice and were hung up on as soon as they received the news. One of the recently fired employee’s tweet appropriately called out Sephora’s hypocrisy: “Thanks for breaking all our hearts. But ‘beauty stands together’ right?”. Sephora’s alleged commitment to its workers was quickly broken.

Electric scooter company Bird similarly fired over 30% of their workforce on March 27th. More than 400 employees were added to a Zoom call entitled Covid 19 update (with under an hour’s notice) in which an automated message alerted them of their firing. Even more ominously, the staff’s company-issued computers were immediately shut down, and their Slack and email accounts locked. As one now former Bird employee put it, “It felt like an episode of Black Mirror.” For an intimate tech start-up with just 1,000 staff, this cold-blooded approach to firing is extremely inconsiderate. When contrasted with the many other micromobility companies that have continued full operations amid the crisis, Bird’s actions appear even more callous.

Counterintuitively, even the large medical staffing company Alteon Health is cutting salaries, time off, and retirement benefits during this crisis period. Despite being a time when healthcare workers’ value is most evident, they too are feeling the effects of immoral business practices. These pay cuts compound healthcare workers’ lack of protective equipment and inability to see their families.

Then there is of course Amazon, who has resisted closing facilities where employees have tested positive for the disease. In fact, when 60 workers walked off the job at the Staten Island fulfillment centre for this very reason, the leader of the strike was fired. This is not entirely surprising coming from a corporation that has a disastrous workers’ rights reputation. Amazon is even sending home feverish employees without pay. Given that Amazon warehouse workers are some of the worst paid in the US and that the corporation is worth $1 trillion with a net income of $12 billion, clearly it can continue to pay its staff while still remaining competitive. These issues are not unique to the United States. Canadian fast-casual restaurant chain Freshii – worth $29 million and with operations in 16 countries – recently laid off a number of head-office employees without pay and moved others to a four-day week while cutting salaries by 20%.

The perverse actions of these companies are highlighted when compared with the proactive approaches taken by many other businesses and executives. Dallas Mavericks owner Mark Cuban immediately put in place a plan to pay hourly arena staff when the NBA season was cancelled. Microsoft is doing the same for its hourly workers that support its headquarters. Although not an extreme financial burden for the multi-billionaire, Cuban went even further and is reimbursing all purchases made by his employees at local, independent small businesses, recognizing the need to support those struggling in the community. French food-products corporation Danone made a similar commitment in contributing €250 million to 15,000 small businesses in its ecosystem. 

Many CEOs and executives are forgoing or reducing their annual salary to ensure the full employment of their workers, including those of Delta, Columbia Sportswear, and Texas Roadhouse.  Some companies are having to get creative to limit layoffs: Australian airline Qantas is in talks with supermarket chain Woolworth to redeploy some of its workers in grocery stores, with the idea they would return to Qantas as flight demands increase again.

These moral approaches point to a common investment in workers that goes beyond simple CSR. This highlights the gap between companies preaching lip-service and those who genuinely care about their workers. The repercussions of COVID-19 will far outlive the current crisis, and how companies treat workers during this pandemic could define their brands for decades.