Afternoon Coffee: RigUp lays off 100+ over coronavirus and oil; Tipalti waives fees for nonprofits; Delta’s voluntary leave tops 35,000; COVID-19 drugs could cost $1

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RigUp, an Austin, Texas-based marketplace for on-demand services and workers in the oil and gas and alternative energy sectors, has laid off roughly one-third of its employees, according to the Austin Inno website. The actual number of employees let go has been reported at over 100. But that’s not the whole story by any stretch.

The company has suffered a double-whammy of sorts, both the COVID-19 crisis and the depression of crude oil prices. The average crude oil spot price has dropped from over $60 in December to about $20 this week, owing to the price war between Saudi Arabia and Russia and the COVID-19 economic slowdown.

RigUp co-Founder and CEO Xuan Yong said: “Based on the economic hit in oil and gas coupled with the impacts of the COVID-19 outbreak, we believe this decision was necessary to support our company’s long-term commitment to our contract workforce and the industries they serve.”

While that might look like RigUp is between a rock and a hard place, the company did raise $300 million at the end of October 2019 (see the Spend Matters’ analysis, Online Platform RigUp Raises $300 Million: Maybe Not Just Another Unicorn?). So it appears that RigUp may be well-braced and cushioned against the negative impacts for the time being.

Just yesterday, RigUp was featured as an example of an “external platform or networks for geo-specific, on-demand workforce/services” in Spend Matters’ CORONAVIRUS RESPONSE: Try these innovative contingent workforce/services, mobile-first solutions to find help where you need it. While the oil and gas industry may now be in a slump during the critical/acute phase of the COVID crisis, things could change for the industry as the economy begins to reactivate this year. In addition, the Russians and the Saudis have just yesterday resolved their differences, and crude oil supply is now being constrained. Oil prices didn't rise yesterday because an even bigger cut to oil production was expected.

In any case, RigUp appears to be a platform company designed to meet the needs of a dynamic, cyclical and price-sensitive energy sector, by allowing its customers to ramp up (and down) their contractors, in different locations, as the need arises. Those contractors remain knowable and contactable on the RigUp platform, which hosts 25,000 contract workers and 10,000 service providers.

Tipalti waives fees for COVID-19 relief payments

Tipalti, a global payables automation provider, has announced that it will waive platform fees for one year in an effort to assist guilds, nonprofits and trade groups during the COVID-19 crisis, reports. The company announced that it hopes this move will help organize and disburse relief payments to members of the service industry.

“We know that during this COVID-19 pandemic, many workers are relying heavily on guilds, associations and trade groups for financial support, so we want to help make it easy for these organizations to pay their members in an efficient, fast and safe manner,” said Chen Amit, CEO and co-Founder of Tipalti, in a press release.

Tesla starts selling locally made Model 3 cars in China

Reuters reports that U.S. electric vehicle maker Tesla says it has started the sale of two more variants of the Model 3 built at its Shanghai plant in China. With this, all Model 3 sedans sold in China are no longer subject to import taxes since they are now locally made.

Tesla says that it plans to begin delivering the first of these Model 3 cars as soon as June, according to Reuters. The development comes after Tesla suspended production at its San Francisco Bay Area plant due to the impact of COVID-19, as well as months of metal and car tariff impacts as part of the U.S.-China trade war.

Delta Air Lines offers voluntary leave of absence due to COVID-19

Nearly 35,000 workers of Delta Air Lines have volunteered to go on unpaid leave of absence because of the coronavirus pandemic, according to a report from Reuters. This was one of the many measures Delta has used to stem costs during the crisis.

Reuters reports that in a memo to employees, Chief Executive Ed Bastian had said the company was enhancing the benefits provided to employees while on leave, including new longer-term leaves of up to 12 months. The company continues to look for more volunteers.

Lockheed Martin speeds up supply chain payments

Lockheed Martin has sped up $156 million in supply chain payments in the last three weeks as part of its response to the COVID-19 crisis. The company now expects that number to almost triple because of the Defense Department’s new progress payment policy, according to a report from Washington Technology.

With these policy changes, Lockheed expects it can flow down more than $458 million in accelerated payments to supply chain partners, according to the report.

Study says coronavirus drugs may cost as little as $1

A new analysis of nine drugs in clinical trials has shown that new coronavirus treatments could be made for as little as $1, according to Bloomberg News, quoting a new study published in the Journal of Virus Eradication.

Results of controlled tests will begin to emerge in the next three months. If results of these tests are confirmed, medicines for COVID-19 could be manufactured from $1 to $29 a course, according to Bloomberg News. This would allow drug manufacturers to scale up production  to provide low-cost medicines for coronavirus care worldwide.

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Read all of Spend Matters’ coronavirus coverage here.

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