Companies Cut Travel as Coronavirus Spreads

Twitter and Google have asked some international employees to work remotely to guard against the ongoing spread of the coronavirus, as a growing number of companies are deciding to empty offices, cancel business travel and curtail operations in areas where infection is prevalent.

In a blog post published on Monday evening, Twitter said it is "strongly encouraging all employees globally to work from home if they're able," citing the ongoing coronavirus outbreak as a motivating factor. Remote work will be mandatory for all employees in Hong Kong, Japan and South Korea, according to the post, and the tech company continues to adhere to previously announced "travel, event and visitor restrictions."

Many of Google's 8,000 employees in Dublin, Ireland, were reportedly similarly asked to work remotely on Tuesday for precautionary reasons after an employee developed flu-like symptoms, according to Business Insider. A Google employee in Zurich last week tested positive for the coronavirus, which has sickened more than 90,000 people around the world, killing 3,000.

The tech giants are two of a host of international organizations that have taken measures in recent weeks to protect employees from the spread of the disease. Chevron, similarly, asked employees at a London office last week to work remotely after an employee developed flu-like symptoms and was tested for the coronavirus.

"This is as much an economic emergency for many companies as a medical one, and they should quickly assess plans to permit remote work to minimize the loss of production," Michael Droke, a partner at Dorsey & Whitney international law firm in Seattle, said in a statement on Tuesday.

Businesses across industries are bracing for supply chain disruptions and soft demand as the outbreak spreads and governments seek to contain its mobility – in some cases instituting economically depressing isolation and quarantine measures designed to keep healthy people from interacting with those who are actively sick.

But some companies are already moving to limit employees' travel – hoping to lessen the possibility of the infection spreading through an office. Amazon last week told its nearly 800,000 employees to avoid "non-essential travel." Salesforce, similarly, announced on Monday that it was "prohibiting cross border travel" for all employees and "restricting all but the most critical domestic travel."

Nestle, L'Oreal and Cargill are among several other international corporations to request employees postpone travel for at least a few weeks.

"The increasingly widespread coronavirus along with the accompanying 'virus fear' is severely disrupting travel activity, leading consumers and businesses to curtail demand and disrupting global and domestic supply chains," Gregory Daco, chief U.S. economist at Oxford Economics, wrote in a research note on Tuesday, adding that "if authorities decide to close schools, severely restrict travel and limit all nonessential movement, the U.S. economy will fall into a recession."

Travel restrictions have led to dozens of high-profile trade show cancellations in recent weeks. Facebook and Google have canceled their own conferences, and Facebook, Twitter and Intel have withdrawn from participation in the annual South by Southwest conferences in Austin, Texas. As of Tuesday afternoon, more than 33,000 people had signed an online petition calling for the cancellation of South by Southwest, fearing that the gathering of people would lead to transmission of the virus in Texas and abroad.

"Trade show attendance and trade shows themselves may not be as large as they would have been otherwise," Mark Vitner, a managing director and senior economist at Wells Fargo Securities, said during a recent coronavirus-focused webcast.

He also noted that many digital- and electronics-focused trade shows "are heavily attended" by Chinese suppliers and representatives already facing travel restrictions within and outside of China.

In light of these travel restrictions, analysts widely predict tourism, hotel and airline companies will be among the first to see tangible business impacts from the spread of the coronavirus – especially as airlines curtail flight offerings to heavily infected parts of the world.

"Demand has already dropped sharply for firms operating in the automobile production, airlines, travel and tourism, and leisure and hospitality sectors," Scott Anderson, chief economist and executive vice president at Bank of the West Economics, wrote in a recent research note. "Risk of a 2020 recession in the U.S. is rising. I would put the risk today at least as high as it got last summer, at around 40%."

United last week announced a reduction in its service to Asia, cutting trips to and from Japan, Singapore and South Korea. Delta, British Airways and Lufthansa have made similar announcements, and many airline companies are waiving change fees for certain customers whose travel plans have been impacted by the spread of the virus.

"The virus and the measures that are being taken to contain it will surely weigh on economic activity, both here and abroad, for some time," Federal Reserve Chairman Jerome Powell said during a news conference on Tuesday. "We are beginning to see the effects on the tourism and travel industries."