Amidst a global fear of the flu-like Coronavirus, many corporations around the world have decided to temporarily shut their operations in China. With the virus spreading fast, an alarm has been set off across the globe with companies shutting their stores, putting travel restrictions on employees and warning of a financial hit from slowing business in the world’s most populous country.
Starbucks Corp on Tuesday became the first major US company to warn of a financial hit from the virus, as it closed thousands of restaurants and adjusted operating hours in its biggest growth market.
The company expects the financial impact to be temporary and depending on the number of stores it has to close and for how long. Currently, about half of its stores are shuttered in China, which makes up about 10% of global revenue.
Talking about the store closure, Starbucks CEO Kevin Johnson said, “Starbucks is responding to the virus in a thoughtful and responsible way to protect our partners and support health officials and the government as they work to contain this public health risk. “I am proud of how Starbucks China is navigating a very dynamic situation.”
Starbucks’ main rival in the Chinese market, Luckin Coffee Inc, has also said it will keep its stores closed in Wuhan city throughout the Lunar New Year holidays.
Following Starbuck’s footsteps, Google has also announced that it is temporarily decided to shut down all of its offices in China. This shutdown includes all its offices in mainland China, Hong Kong, and Taiwan. Although Google doesn’t offer its services in the country, its mainland offices focus on sales and engineering for its AdSense business.
Sweden-based IKEA has also announced the temporary closure of all its stores in China. The decision to shut down operations in all of its 30 stores follows an announcement from the world’s biggest furniture retailer on January 29 that it was going to close half of its stores and shortening the opening hours.
The virus, which originated in the Chinese city of Wuhan, has spread across the world with confirmed reports of 170 people dying because of it and infecting more than 1,700 people. India has so far confirmed only one such case, although the Ministry of Health and Family Welfare has issued an advisory to the citizens to take care of themselves.
Update: The Chinese government has recently asked all the private companies to temporarily shut down their operations in the country as the virus is now rapidly spreading towards the mainland. Soon after the government ordered, Tesla was the first company to shut down its Chinese factory.
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