UPDATE: Oct. 2, 2020: P.F. Chang's offered Restaurant Dive additional information in an emailed statement. The chain is currently in the middle of opening five new P.F. Chang's To Go concepts and six traditional P.F. Chang's restaurant openings over the next six months.
- P.F. Chang's is extending temporary layoffs for potentially up to 5,800 employees across at least 20 states, according to Worker Adjustment and Retraining Notification filings as of Oct. 1 viewed by Restaurant Dive.
- "These WARN notices were provided to all company restaurant employees in order to comply with WARN requirements to notify employees if their hours were reduced by more than 50% for 6 months or more," P.F. Chang's said in an emailed statement. "Since the COVID-19 pandemic resulted in employees’ loss of hours that started last spring, there is a possibility that some individuals’ hours may have been reduced to that extent over a 6 month period and they have been notified of such a possibility. The Company was over inclusive in to whom the notices were sent to ensure any necessary compliance with the law."
- The scope of P.F. Chang's temporary layoffs don't bode well for the chain's recovery from pandemic disruption, especially since the restaurant received between $5 million and $10 million in Paycheck Protection Program loans in April, according to CNN. The casual dining and eatertainment segments have been particularly hard hit by dining room restrictions and closures. Just over two weeks ago, Dave and Buster's announced over 1,300 permanent layoffs across seven states.
Almost all of P.F. Chang's notices, filed for individual stores, said it could "affect up to 75 employees." Michigan reported the most temporary layoff extensions, with 600 across eight locations. New York reported 534 impacted employees across nine restaurants, while North Carolina and Pennsylvania both reported 525 layoffs at 7 restaurants. California, the state with the most P.F. Chang's locations (31), only reported 62 layoffs, but its layoffs are part of a permanent store closure in Monterey. The overall number of temporary layoffs could rise as states, like Virginia and Utah, publish new notices or update their site. Some do not appear to have been updated since earlier this summer.
The chain noted in an emailed statement that it is increasing operations across the country as local and state restrictions are relaxed for dine-in seating. P.F. Chang's is also hiring new employees and increasing hours for current staff members, and its takeout and delivery business is performing strongly, according to the company. According to its website, the chain has 215 locations across 40 states.
P.F. Chang's was already experimenting with deeper investments in off-premise channels prior to the pandemic. In February, the chain opened a to-go only restaurant in Chicago that offers catering, carryout and delivery and about 80% of P.F. Chang's standard menu. As of January, the restaurant planned to open two more to-go locations in Chicago, as well as locations in New York City, Washington, D.C. and Houston.
Prior to the Chicago to-go launch, P.F. Chang's closed its last standard restaurant in the city — foreshadowing how the challenges that casual dining concepts with high rent and overhead costs in urban markets face would be exacerbated by the pandemic.
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Still, the fact that P.F. Chang's is simultaneously extending hours for employees in some markets suggests that business is stabilizing for the company. More and more states and cities are increasing their capacity limits for indoor dining, which gives restaurants across categories better chances of staying open. Some P.F. Chang's layoff extensions were filed in states that just recently relaxed COVID-19 standards. Indiana, for example, where 225 layoff extensions were announced, allowed dining rooms to reopen to pre-COVID capacity on Sept. 26.
Deep-pocketed restaurant chains with robust tech assets have been faring better than local concepts, with the exception of a handful of high-profile bankruptcy filings. But as the pandemic stretches on with no end in sight, more mass layoffs, closures and bankruptcies are likely on the horizon for the restaurant industry. Roughly one in six restaurants have already shuttered, according to the National Restaurant Association, which predicts the market will lose $240 billion in sales by the end of the year if there is no additional relief from the government.