Lettuce Entertain You warns of over 1K layoffs

Dive Brief:

Lettuce Entertain You, the largest hospitality company in Chicago with over 120 restaurants, informed Illinois state officials of potential layoffs that could affect as many as 1,045 employees from 25 restaurants, Eater Chicago reports. Lettuce filed a WARN notice indicating COVID-19 as the driver behind the layoffs.
A company spokesperson told Eater no employees have been permanently laid off as of yet. Layoffs could go into effect in mid-December. The company filed its notice on Oct. 13, two weeks before Illinois announced indoor dining would be suspended once again in the city.
Word of these potential layoffs come despite pivots Lettuce Entertain You made during the pandemic, including launching a "The Best of Lettuce Delivered" campaign that allows customers to order their favorite dishes from multiple Lettuce restaurants at once.

Dive Insight:

Lettuce furloughed some of its employees in March when Illinois Governor J.B. Pritzker issued the state's first shutdown of on-premise dining. Lettuce President R.J. Melman told Eater Chicago that almost all of the employees that could be impacted by layoffs are those who have been furloughed since the spring, adding, "No one expected these furloughs to continue as long as they have." He said he hopes those employees can be rehired in 2021.

Lettuce, like many restaurants, is learning that delivery is no silver bullet for survival amid the pandemic, as evidenced by the 5.5 million restaurant workers who lost their jobs in April. The industry was able to make some gains over the spring and summer months due to outdoor dining — New York City claims outdoor dining saved about 90,000 jobs, for example — but Gusto predicts the impending winter slowdown has the potential to erase 2 million in job gains from August and September. A second shutdown in Illinois certainly doesn't help.

But Illinois is hardly alone in making such a decision. In the past week alone, San Francisco ended indoor dining after just weeks of reopening, while Washington state also implemented a second shutdown of indoor dining. Other states, like Maryland and New Jersey, have tightened restrictions around capacity levels and hours. These restrictions, particularly without winterization efforts, will undoubtedly lead to more layoffs, if not complete closures.

This grim employment picture includes more than Lettuce Entertain You's potential job cuts. Boka Restaurant Group, another Chicago-based multi-concept operator, announced its plans to lay off more than 500 employees in September before round two of shutdowns. Epiphany Farms Restaurant Group, based in Bloomington, Illinois, laid off more than 80 people last week. Layoffs extend beyond Illinois, as well. Feed Me Hospitality Group in Washington expects a "substantial amount" of layoffs due to the state’s new shutdown orders, for example, while Titan Hospitality Group in Maryland is preparing to make cuts within days. Wisconsin-based Bartolotta Restaurant Group has laid off hundreds of employees.

With spiking cases and growing shutdowns, these layoffs are likely just the tip of the iceberg, despite the progress many restaurants have made since March. As James King, CEO of Titan Hospitality Group, told the Capital Gazette, "Our industry has been through so much over the last six months, and I think a lot of us felt like we were finally starting to figure out a business model … to survive. We worked so hard to retain our employees and rehire them. And now the first conversation is how many layoffs we have to have now …"