(Bloomberg) -- More than 150 U.S. businesses that received financing from the Paycheck Protection Program have announced plans to lay off employees, undercutting efforts to preserve jobs at pandemic-hit companies, according to S&P Global Market Intelligence.
The companies, which include arts organizations, real estate firms and manufacturers, are estimated to have received between $291.6 million to $647.5 million in total PPP loans, S&P said in a report Thursday. And yet they had plans to cut 15,814 employees from May 1 to July 17.
The data isn’t comprehensive -- it relied on layoff notices and didn’t include information from all the states -- but it adds to evidence that more virus relief will be needed to stave off job losses.
Carnegie Hall was one of the organizations with the most job cuts, S&P found. It laid off or furloughed hundreds of workers three months after receiving $5.5 million in PPP assistance, according to the report. The venue has said it will remain closed until at least Jan. 7 of next year. Segerstrom Center for the Arts in California and Texas Steel Conversion Inc. were two of the businesses that cut the most staff after receiving PPP loans, S&P found. The companies didn’t immediately respond to requests for comment.
A key piece of the $2.2 trillion virus relief package, the PPP approved 4.9 million loans that totaled $521.1 billion as of earlier this month. The Small Business Administration, which helped oversee the program, estimated that it saved more than 51 million jobs. But an analysis from Bloomberg found that it’s hard to measure unemployment relief based on the loan data.
It’s likely that layoffs have continued since mid-July. About a fifth of PPP borrowers have dismissed more employees or expect to do so, according to a survey from the National Federation of Independent Business, a lobbying group. And many states are suffering a surge in Covid-19 cases, putting reopening plans in jeopardy.
Taking a PPP loan doesn’t mean small businesses are required to retain staff, but the loan is forgiven if companies maintain employee count and use at least 60% of the loan to pay employees. The plans by companies to lay off thousands of employees is “within the rules of the government program,” according to S&P.
“A large chunk of the PPP funds was issued in April, meaning many small businesses could have used the PPP funds for payroll and then later needed to lay off their employees,” the firm said.
More relief may be on the way. Congress is considering a second round of PPP and other aid for small businesses as part of a wider stimulus package. Democrats and Republicans are still far apart, however, and it’s uncertain when a bill may pass.
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