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Richard Branson Announces $250 Million To Save Employees: "Likely Just The Start"

Ryan Ford 24 Mar 2020

It appears that public pressure has reversed billionaire Sir Richard Branson's initial reaction to the coronavirus crisis. He has announced he will be setting up a $250 million rescue package for his 70,000 employees at Virgin to save their jobs, Forbes reported.

Branson faced heavy criticism after initially asking his employees to take eight weeks of unpaid leave during the crisis.

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U.K. politicians were especially critical of the billionaire, with one breaking down Branson's personal net worth versus what his employees would be paid over those eight weeks and urging him to "give up the interest on your wealth for eight weeks and pay your employees yourself their unpaid leave."

Another MP, Kate Osborne, who has been diagnosed with coronavirus, called Branson's proposal "an absolute disgrace" on Twitter.

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For what it's worth, many Virgin employees came out in favor of taking unpaid leave.

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One Virgin Atlantic worker told Forbes that "We will do everything in our power to help see our company survive," while another expressed their thoughts in a Facebook post, writing, "You hear Virgin and you automatically think Richard Branson...I get it. But as one of those staff that this is affecting, I just want to leave this here once again....our CEO is doing everything he can to try and avoid job losses."

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As at least one person noted, unpaid leave beats the alternative.

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"At least this is better than having to make redundancies," said one worker. "The unpaid leave will be spread out over the yearly salary. I personally would take this option over losing my job."

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However, after taking some time to consider the situation, Branson has decided to dip into his own cash.

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In a blog post, Branson confirmed that he, and not Virgin Atlantic, would be "providing a quarter of billion dollars over the next weeks and months" to save the jobs of the 70,000 employees who work in Virgin's various enterprises, including their airline, hotel, and wellness businesses, in 35 countries.

Branson added that the $250 million was "likely just the start."

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Branson called the COVID-19 outbreak "the most significant crisis the world has experienced in my lifetime."

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"Because many of our businesses are in industries like travel, leisure and wellness, they are in a massive battle to survive and save jobs," he wrote.

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Despite digging into his own pockets, Branson noted that the employees at Virgin Atlantic had indeed volunteered to take eight weeks of unpaid leave.

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"Our employees are united as one behind this plan, and our shareholders and partners have respected their vision, so we can hopefully emerge and thrive with as many jobs as possible intact once the situation stabilises," he wrote.

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Like so many other companies, Virgin faces significant trouble in the current economic climate.

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"Our airlines have had to ground almost all their planes; our cruise line has had to postpone its launch; our health clubs and hotels have had to close their doors and all bookings to our holiday company have stopped."

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There's no real tried-and-true path to follow, so Branson says he's trying to keep what's best for his employees firmly in mind.

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"Our people have and, will always be, my number one priority. It is their future job security and their wellbeing that I am 100 per cent focusing on, in these frightening and unprecedented times."

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However, Branson also pointed out that governments still have a role to play.

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"The chances of securing widespread economic recovery will depend critically upon governments around the world successfully mobilising various newly announced support programmes, which in these unique circumstances will be essential to protect people’s livelihoods," he wrote.

The U.K. government has been discussing a bailout package for airlines, but with little progress so far, the Financial Times reported.

h/t: Forbes

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