The restaurant industry is in peril, with the livelihoods of food service workers—who don't know if they'll have jobs in a few days, let alone a few weeks—especially fraught right now. There was more bad news in store for them today: the Union Square Hospitality Group announced they were laying off around 2,000 workers “due to a near complete elimination of revenue." That makes up about 80% of the company's total staff, which includes 18 restaurants in NYC, two in Washington and its corporate office in Manhattan.
The group's founder and CEO, Danny Meyer, said he hopes to rehire the staffers as soon as possible, and that he will forgo his entire salary immediately and indefinitely, and every executive team member will take a significant pay cut. They have created an employee relief fund to use that money, and any donations, to help support the staffers. Through March 24th, 100% of the revenue generated by USHG gift cards purchased on their site will be directed toward that fund. They will also continue to cover employee premium contributions for medical insurance for those who are currently enrolled through mid-April.
"In the 35-year history of Union Square Hospitality Group, this is, without a doubt, the most challenging period any of us has ever encountered as leaders. Reconciling who we are as a people-first company with this brutal moment is nearly impossible," Meyer said in a statement. "We’ve always endeavored to put our people first, and so to conduct such a massive layoff of our cherished colleagues today leaves me gutted. Never could I have fathomed a time where the only path forward would be to lay people off so they can receive unemployment, while this company fights to see another day when we can return to our full staffing levels."
"I said to my team last week that this is a time requiring both reality and hope, and today that is truer than ever," he explained. "The reality is that we’ve had to make drastic and previously unimaginable choices for how we conduct business just to protect our team and our communities. The reality is that in doing so, our revenues have been decimated, and the foundation of our business has been seriously tested. In the absence of income, restaurants simply cannot pay our non-working team members for more than a short period of time without becoming insolvent. In that scenario, no one wins."
The Union Square Hospitality Group restaurants include: Gramercy Tavern, Daily Provisions, Blue Smoke, Manhatta, Caffe Marchio, Intersect, Maialino, Marta, Porchlight, Union Square Cafe, and Vini E Fritti.
Last Friday, the company had announced that it would be temporarily shutting down all of its restaurants in the midst of the new coronavirus crisis.
Earlier this week, city and state officials announced that all restaurants and bars would be closed to dine-in service, and would only be allowed to do take-out or delivery. Many other restaurants have laid off most or all of their staffs in recent days, including Tom Colicchio's Crafted Hospitality restaurant group in New York and Los Angeles, which laid off 300 people, as well as Major Food Group and the Jean-Georges Vongerichten restaurants.
The National Restaurant Association has forecast sales declines of $225 billion over the next three months due to the coronavirus outbreak. The industry group is asking the federal government for a $145 billion recovery fund. At The Atlantic wrote, without it, the industry will need a miracle to survive.
The NY Times' restaurant critic Pete Wells wrote this week that even with people getting delivery or donating to certain places, it isn't enough to stop what's coming: "Because many of the fixed expenses of operating a restaurant haven’t stopped. There is still rent to pay, and taxes, like the New York State sales tax bill due on Friday. Those bills alone could crush restaurants in a matter of weeks, unless they have heaps of cash in reserve." He sees only two outcomes ahead: "In one, state and local governments across the country move rapidly to help them survive the closings and get going again when that’s safe. In the other, bankruptcies cascade across the economy, and people are out of work in numbers this country has not seen since the 1930s."
Meyer echoed Wells's words, saying they they could not depend on the generosity of the community alone: "If ever there were a time to call on the government to provide enlightened leadership, it is now. Our employees need that support to sustain their livelihoods while waiting for our restaurants to reopen. I am calling on our city, state, and federal leadership to step in with a full emergency relief package for restaurant and bar workers, and I pledge my immediate service—on behalf of, and along with other industry leaders—to help come up with economic solutions that work for all. Our industry is both a significant employer and contributor to the fabric of life in New York."