Danny Meyer's Union Square Hospitality Just Cut 80 Percent Of Its Workforce
In a move that is both tragic and unfortunately predictable, the Danny Meyer owned Union Square Hospitality Group announced that it made the decision to lay off 2,000 of its employees on Wednesday, a number that comprises 80 percent of the restaurant group's workforce, according to the New York Times. The cuts were made from the group's Manhattan headquarters and across its 20 restaurant portfolio, including NYC restaurants like Union Square Cafe and Gramercy Tavern. The layoffs came as a direct result of what the group referred to as "a near-complete elimination of revenue," in a statement.
The restaurant industry has been particularly hard-hit in the wake of forced shut-downs and "social distancing" measures following the COVID-19 coronavirus outbreak. Despite attempts to pivot to delivery service, many restaurants even at the top of the industry have been forced to eliminate positions. In recent days, Major Food Group, a restaurant group that owns hit spots like The Grill and Dirty French, celebrity chef Tom Colicchio's Crafted Hospitality, and chef Jean-Gorges Vongerichten's restaurants have all announced cuts to their staff.
The restaurant industry has historically operated on thin margins, with expensive real estate as well as labor costs and the short shelflife nature of food products all contributing to high overall costs. Even at famed high-end restaurants the expense of doing business is high (Vongerichten's flagship New York eatery Jean-Georges reportedly does not turn a profit despite pulling in $25 million a year.) Continuing to make rent and pay full-time staff while also running at reduced hours or completely closing for operations has proved too great a financial challenge for many, from small, local establishments to national and international culinary luminaries.
With avoidance methods to contain the coronavirus outbreak poised to continue for weeks yet, cutbacks like these are likely the first of many we'll see.
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