Economy

Small businesses are struggling with lower sales, job cuts amid reopening: Facebook report

Hemani Sheth Mumbai | Updated on September 18, 2020 Published on September 18, 2020

Small businesses have slowly started reopening with the unlocking in place   -  THE HINDU

54% of businesses report sales drop, while 33% have cut jobs

As small businesses continue to reopen amid the Covid-19 pandemic, they are struggling with lower sales and reduction in staff, according to the third edition of Facebook’s Global State of Small Business Report, a research collaboration with The World Bank and OECD.

“While small businesses continue to reopen, many still reported lower sales and sustained reductions in employment due to the Covid-19 pandemic,” the report said.

According to the report, 54 per cent of businesses reported a drop in sales compared to the same time period last year while 33 per cent SMBs have reduced employment. Agriculture, transportation, logistics and construction are the top sectors facing major job cuts.

Some small businesses continue to remain shut due to financial challenges. 16 per cent SMBs remained closed, down from 19 per cent from Facebook’s previous survey. 19 per cent of businesses in consumer-facing sectors such as hotels, restaurants and cafes remained close.

“Financial challenges have overtaken lockdown orders as the primary reason surveyed small businesses reported being closed,” the report said.

Navigating the negative impact of Covid-19

Businesses are going digital to navigate the negative impacts of the pandemic as per the survey. Over 40 per cent of businesses in majority regions made more than a quarter of their sales online.

“Many small businesses have seen the benefits of shifting to e-commerce. Businesses that reported making over 25 per cent of their sales online were more likely to report higher sales than this time last year, and less likely to have reduced their number of employees as a result of the pandemic, compared to businesses that made less than 25 per cent of their sales online,” the report said.

The report is based on a survey of over 25,000 small businesses across more than 50 countries in July.

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Published on September 18, 2020
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