Outback Steakhouse cuts hours to the bone

Parent company Bloomin’ Brands held out for a while before slashing payroll

TRD NATIONAL /
May.May 06, 2020 04:05 PM
Bloomin’ Brands CEO David Deno and an Outback Steakhouse (Credit: Bloomin' Brands and Jeffrey Greenberg/Universal Images Group via Getty Images)

Bloomin’ Brands CEO David Deno and an Outback Steakhouse (Credit: Bloomin’ Brands and Jeffrey Greenberg/Universal Images Group via Getty Images)

Outback Steakhouse’s parent company is cutting hours for more than 2,600 employees across New York — the latest in a series of labor cuts in various states by the restaurant group.

The Australian-themed chain’s parent company Bloomin’ Brands filed eight temporary layoff notices with the state’s Department of Labor for restaurants throughout New York. However, company spokesperson Elizabeth Watts said the firm was not actually letting go of any workers but just reducing their hours.

“We have not had any layoffs and do not currently plan any,” she said — but acknowledged that some workers’ hours had been cut to zero.

“Some employees are working in our restaurants, which are still open for take away and delivery,” Watts continued. “For employees who’ve had their hours reduced, we have provided relief pay for six weeks, and we assess our ability to continue to do so every two weeks.”

On March 20 the company withdrew its guidance for 2020 earnings and announced that it had drawn down “substantially all” of its revolving credit facility, yet had only a bit more than $400 million in cash. Bloomin’ has about 1,450 restaurants, some of them franchises, around the world.

The greatest number of employees affected is on Long Island, where the company is trimming the hours of 696 employees.

New York City has the second highest number affected, 447, while Broome and Chemung counties have the fewest — 154, according to the filings. All of the reductions are because of the coronavirus pandemic, according to Bloomin’ Brands.

The labor cuts are spread out across 38 restaurants in total: 27 Outback Steakhouse locations, six Carraba’s Italian Grill locations and five Bonefish Grill locations.

The action in New York City hit six Outback Steakhouse locations: two in Brooklyn and one each in Manhattan, Queens, the Bronx and Staten Island.

In recent weeks, Bloomin’ Brands has filed layoff notices in a number of states as it slashed hours for thousands of jobs — after saying in mid-April that it had yet to resort to furloughs or layoffs. (That same week President Donald Trump formed a “Great American Economic Revival Industry Group” and stacked it with industry leaders including Bloomin’ Brands CEO David Deno to advise the White House on reopening.)

In Maryland, Bloomin’ reduced hours for nearly 3,000 people statewide at Outback Steakhouse, Bonefish Grill and Carrabba’s Italian Grill after the dining rooms were required to close, the Baltimore Sun reported. Some workers were kept on as the eateries remained open for takeout, a Bloomin’ spokesperson told the newspaper.

The restaurant group also cut hours for more than 700 workers in Connecticut, the Hartford Courant reported last week. And on Monday, the Philadelphia Business Journal reported that Bloomin’ delivered the bad news to nearly 3,000 employees in Pennsylvania.

Bloomin’ Brands’ stock price, which was $23.46 as recently as Feb. 21, dipped as low as $4.54 on March 20 but was trading at about $9.50 Wednesday afternoon.

The pandemic has been devastating for the restaurant industry, with eateries across the country forced to close or rely exclusively on takeout and — in the case of fast-food joints — drive-thru services.

In New York City, a recently proposed City Council bill aims to help restaurants and other businesses by banning enforcement of personal liability provisions in commercial leases through at least September 2020. Essentially, it would let business owners abandon their leases without landlords coming after their personal assets for unpaid rent.

The industry will almost certainly have to go through major changes even after governments lift social distancing restrictions, with possibilities including more strictly timed seatings and partnerships between landlords and restaurateurs.


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