The California-based chain has furloughed about 41,000 hourly restaurant staffers because of reductions in dine-in service and “landlord closures of certain properties,” it said in a Friday regulatory filing. That number accounts for more than 90 percent of the roughly 44,900 restaurant workers the company employed as of Dec. 31, according to its latest annual report.
Cheesecake Factory did not indicate how long the furlough will last, but it said the affected workers will keep their insurance and benefits eligibility until June 1. And if it’s any consolation, they’ll also receive “a daily complimentary meal from their restaurant,” the company said.
Cheesecake Factory is also cutting pay for its corporate and bakery administration employees between 10 and 20 percent, according to the filing. CEO David Overton and other top executives will cut their salaries for this year by 20 percent starting April 1 in response to the virus’s financial impact, and the board of directors will reduce their annual cash retainer fees by the same amount, the company said.
In another sign of trouble caused by the coronavirus, Cheesecake Factory recently told its landlords that it would not pay rent for any of its restaurants for the month of April. The chain owns and operates nearly 300 eateries in the US and Canada.
The company is in talks with landlords about potentially deferring, abating or restructuring rents “otherwise payable during the period of the COVID-19 related closure,” the Friday filing says.
Cheesecake Factory shares were down 3.3 percent in premarket trading at $19.01 as of 7:53 a.m. Friday after rising about 4.2 percent on Thursday.
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