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Message: <blockquote data-quote="Jaysen" data-source="post: 29042" data-attributes="member: 1">Redundancies on the Horizon for British AirwaysBy [USER=3442]@Rachel S[/USER]The StoryBritish Airways (‘BA’) has announced plans to cut 12,000 of its 42,000 workforce as coronavirus-driven lockdowns halt commercial air travel and airlines burn through cash. Parent company IAG revealed revenues fell 13% to €4.6bn (£4bn) in the first three months of 2020, with BA Chief Executive, Alex Cruz, citing the reasons as the need to “take action now”.Views of V-shaped economic recovery now appear overly optimistic and BA’s redundancy plans paint a bleak picture for the future of the weathered aviation sector. IAG, which also owns Aer Lingus and Iberia, stated the redundancies formed part of a necessary "restructuring and redundancy programme", given airline travel is predicted to take several years to return to 2019 levels.Furthermore, as part of a phased exit from lockdown, the UK government has announced the introduction of a 14-day quarantine on all arrivals into the country. IAG warned on Thursday that BA would not resume flying under these conditions.What It Means For Businesses and Law FirmsAs the UK furlough scheme is wound down and to navigate the turbulence that lays ahead, more airlines will likely move toward a leaner business model and consequential large-scale redundancies. Both Ryanair and Virgin Atlantic have announced 3,000 jobs are at risk and Qatar Airways also warned of substantial job losses.CEO of Berkshire Hathaway, Warren Buffett sold out of American Airlines, Delta Air Lines, Southwest and United Airlines in April, warning that the “world has changed” for the aviation industry. While Australian carrier Qantas Airways has now shelved plans for ‘Project Sunrise’, the world’s longest commercial flights, further exemplifying the lack of faith in the future of long-haul travel.Employment lawyers will be needed to advise on consultations with unions over mass redundancies. In this case, BA has served official notification about redundancy preparations on the GMB union, representing ground staff; Unite, representing cabin crew; and the British Airline Pilots’ Association (‘Balpa’). Accordingly, Balpa, which represents BA's 4,300 pilots, is understood to have asked lawyers to begin the legal process to apply for redress on behalf of the 1,100 pilots who are at risk of redundancy.Airbnb Staff VacateBy [USER=4422]@Curtley Bale[/USER]The StoryShort-term rental specialists, Airbnb, are cutting 25% of their workforce after seeing revenue significantly decrease. The American company was once touted as a revolutionising force in the market but has recently had to take drastic steps to steady its balance sheet.Airbnb has also cut advertising from social media platforms, in order to save $800m. Worries about the company’s long-term future have grown in recent weeks as the vacation/hospitality sector looks set to be most terribly affected by Coronavirus.What It Means For Businesses and Law FirmsAirbnb has recently revised its expected 2020 revenue to be less than half of the $4.8bn it turned over in 2019. This is particularly worrying considering the company’s strong financial position prior to the outbreak; in 2019, the company was valued at $31bn. The market had been eagerly anticipating the company’s IPO, with some analysts predicting it to be one of the largest of 2020.Instead, the short-stay rental specialists have had to explore new funding, raising $2bn last month. This valued the company at just $18bn. Moreover, there will now be a push towards the more domestic, affordable properties as opposed to the lucrative, luxury properties which generate far more commission for Airbnb. Alongside cutting 1,900 jobs, the company has to find other ways to save cash. Whilst it is hoped that promoting domestic experiences will be the key, April revenue is already down 50% compared to last year.Airbnb is not alone in the struggle. Another travel booking giant, Expedia, recently cut 3,000 jobs and raised $3.2bn in fresh capital. Airbnb’s competitors are also having to take drastic action to protect their balance sheet during the currently unpredictable climate. This may provide reassurance for Airbnb, alongside a recent pick up in booking numbers across the US and Europe, perhaps an early indication of economic recovery and the return of consumer confidence in making travel plans. Domestic bookings in Denmark and the Netherlands have so far increased by 75%, compared to booking numbers in April 2019. Whilst the company has not witnessed the blockbuster figures it expected prior to the pandemic, 2020 may be the year for Airbnb to prove its resilience to the market, which will only enhance its reputation and potential value, when it eventually goes public.Law Firms in the COVID-19 crisisEversheds has introduced ‘flexi-working’ and extra holiday for carers. The flexible working scheme allows for the reduction of team working patterns, meaning teams are moved ‘on’ and ‘off’ throughout the coming months, with pay ‘on flex’ where the team becomes less busy (below 80% of their usual working). The enhanced holiday scheme gives an additional day of holiday for every four taken to care for others. The firm also set up a hardship fund to help impacted employees access financial support (The Lawyer).Taylor Wessing announced a second wave of measures to mitigate the effects of coronavirus on the firm, also introducing a flexible working programme, which involves employees agreeing to a 20% hour and salary reduction from 1st June, to make necessary cost reductions whilst preserving jobs (The Law Gazette).Litigation funder, Augusta Ventures conducted a study into the financial state of law firms. Investigation of the accounts of 40 law firms showed that 55% had insufficient cash reserves to cover expenses for one month, alongside 38% lacking the ability to pay salaries for one month. The study showed how many firms “left balance sheets arguably undercapitalised to deal with a prolonged financial shock” and the significant strain the coronavirus will have on the balance sheet of many firms (City AM, The Law Society Gazette).‘Business as usual’ – the deals which went ahead as usual this week:<ul> <li data-xf-list-type="ul">Clifford Chance acted for Telefonica on its estimated £31bn acquisition of Virgin Media from Liberty Global. HSF also advised Telefonica on the M&A deal. Liberty Global were represented by A&O; Shearman & Sterling also provided advice on the US aspects of the transaction, given Liberty are a long-standing client. Ropes & Gray advised on the financing of the transaction.  </li> <li data-xf-list-type="ul">White & Case acted for Omilia, a Cypriot start-up focusing on the development of conversational AI. The company received US$20m investment from Grafton Capital, a UK-based growth capital firm, advised by Hogan Lovells. The funding will be applied to develop. This represented the company’s first round of fundraising from external investors.</li> </ul></blockquote>

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