The COVID-19 Effect on Employment
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The COVID-19 Effect on Employment

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Cas Biekmann By Cas Biekmann | Journalist and Industry Analyst - Mon, 03/23/2020 - 17:08

COVID-19’s negative effects are already being felt at companies and stock markets worldwide. But what does COVID-19 mean for Mexico’s talent from various sectors?



Workers in the automotive sector have not seen good times, but with COVID-19 they face even more problems. As of March 23, nine of the 12 carmakers in the country have partially suspended operations at their factories. This puts the positions of workers in peril, as well as those fabricating parts for these companies. Nonetheless, the international sphere has seen car factories being used to fabricate medical equipment such as filters, which might be an opportunity for Mexico, as well.



Solar energy, especially, seems to be taking a blow. Around 90 percent of the industry’s raw materials and manufacturing takes place in China, where the virus first struck. Although media outlets have already reported improvements in the country’s situation, the supply chain for solar energy remains crippled. Worldwide, larger projects in the sector have been put on hold. Although there have been no reports of layoffs as of yet, lower energy demand due to developments in other sectors spells trouble for jobs in Mexico’s energy sector.


Oil & Gas

The sector has been massively impacted by both the virus and a slash in oil prices, factors that perhaps spurred PEMEX to keep working, as reported by Excelsior, amidst reports of lack of soap and anti-bacterial hand gel, while PEMEX’s corporate office remains open. Between 8,000 and 10,000 workers operate there daily, despite reports that say at least one PEMEX employee contacted the virus, most likely in Campeche. Wider effects of the virus have yet to be seen in Mexico, although PEMEX’s Director General Octavio Romero already signaled administrative costs would be slashed and new hiring will be put on hold. Although operations could go the same way as lower prices make producing unprofitable, a hedge fund protects the NOC for the current year.



Fitch and others see a risk for mineral producers worldwide, Mexico included. To counter negative effects, Mexico’s major mining companies such as Minera Alamos and Argonaut Gold have started taking precautions for their workforce. Automated mining might see a boost because of the virus. While this solution is not yet ready for widespread adoption, it would require a smaller workforce and specialized training for the fewer onsite staff managing the machines, a particularly large disruption for workers in the sector.



One sector that adopted home office before it was deemed a necessity is tech. While a general economic downturn will inevitably cause an impact, tech companies worldwide are adapting to working from home, while internet providers are seeing much more traffic. Usually at the forefront to solve various new problems society has to deal with, Mexico’s young tech sector might even see this period as one of opportunity.



This week, Mexico City Mayor Claudia Sheinbaum confirmed that infrastructure projects in the city would continue moving forward. Moreover, two new projects promoting re-industrialization were announced as well. While political parties such as PAN have asked for suspension of the Maya Train project, it is still on the table along with the Santa Lucía airport and the Dos Bocas refinery. Training for workers associated with these projects continues and construction timelines remain unaltered. 



COVID-19 mostly affects Mexican seasonal workers migrating to the US. The country has suspended the issuing of H2A guest worker visas, affecting labor-intensive parts of US agriculture, such as fruit and vegetable harvests. Those who already own a visa, however, are still able to enter the country.

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