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Gloom grips US small businesses, with 52% predicting failure

Bloomberg logoBloomberg 5/6/2020 Alex Tanzi

COVID-19 could shutter most American small businesses.

That’s according to a new survey from the Society for Human Resource Management which found that 52% expect to be out of business within six months. The survey of 375 firms was conducted between April 15-21 and doesn’t account for improved business conditions as some U.S. states reopen this month.

“SHRM has tracked Covid-19’s impact on work, workers, and the workplace for months,” said SHRM Chief Executive Officer Johnny C. Taylor, Jr., “but these might be the most alarming findings to date. Small business is truly the backbone of our economy. So, when half say they’re worried about being wiped out, let’s remember: We’re talking about roughly 14 million businesses.”

a screenshot of a cell phone: Most Small Firms See Revenues Fall © Bloomberg Most Small Firms See Revenues Fall

Just over a third of small firms expect that they can continue to operate more that 6 months, while 14% are uncertain, according to the survey. About one quarter of firms have seen revenues rise or remain unchanged in recent months.

Among employees, hourly workers were hit hardest with eight in 10 firms cutting those positions, while 60% of surveyed businesses laid off salaried workers. A third of the companies polled by the advocacy group expected their payroll reductions to be permanent.

Related video:Americans are on the brink in the service industry amid COVID-19 pandemic (provided by USA Today)

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