Companies profiting from the pandemic hand out big profits to shareholders, while people lose their jobs
In a new report, Oxfam shows that 32 companies that profited from covid-19 exacerbated the economic impact of the pandemic by distributing profits to shareholders instead of securing the jobs and safety of employees.
Oxfam's new report Power, Profits and the Pandemic published today shows that 32 major companies have benefited financially from the pandemic by prioritising share dividends over securing their employees' jobs. At the same time, half a billion people are expected to fall into poverty in the wake of the pandemic and 400 million jobs have already been lost globally.
One of the beneficiaries of the pandemic is the world's richest man, Amazon owner Jeff Bezos, who could personally pay each of the company's 876,000 employees a one-off bonus of $900,000 today and still be as rich as he was at the start of the pandemic.
The list of companies that are taking advantage of the pandemic is long. In Nigeria, the country's largest cement company, Dangote Cement, is reported to have laid off over 3,000 workers while still expecting to pay 136% of profits to shareholders by 2020. And in South Africa, the country's three largest healthcare companies - Netcare, Mediclinic and Life Healthcare Group - paid out a staggering 163% of their profits to shareholders through dividends and share buybacks.
Oxfam International's Secretary General, Chema Vera, strongly criticises companies for using the pandemic for their own financial gain:
"It is reprehensible that there are companies that, in the midst of a pandemic, pay out massive sums to wealthy shareholders when they have received government bailouts designed to protect jobs," says Vera.
Oxfam is now calling for a crisis response that prioritises support for workers and small businesses, including through a covid-19 tax on pandemic profits as a way of redistributing resources from those who benefit from the pandemic to those who bear the burden. In addition, policy makers need to create more incentives and regulations for sustainable business, including by introducing binding rules to prevent companies' negative impact on human rights.