As statewide restaurant sales plummet amid the COVID-19 outbreak, nearly 500 employees between Barley & Board, Lone Star Attitude Burger Co. and Earl’s 377 Pizza were furloughed Saturday afternoon in the latest impact to the Denton-area economy.
The restaurants, managed by Radical Hospitality Group, will be closed for the foreseeable future.
Kjell Knutson, CEO of Radical Hospitality Group, said the decision to furlough restaurant staff was not easy — but necessary. Between the three restaurants, he said, “we’ve seen sales go from 100% to 0%.”
By furloughing, he said impacted employees would be able to apply for unemployment and other opportunities.
“We wanted to protect our staff and get them in the front of the line for benefits,” Knutson said. “We’re going through monumental times, and we’re not doing it with the best fluidity, but we’re making decisions as we go.”
In Texas, the food service industry employs more than 1.4 million workers — roughly 12% of the state’s overall employment, according to the Texas Restaurant Association. Because Texas restaurants have been restricted to takeout meals only, the association projects that as many as 1 million restaurant jobs could be lost in the coming weeks.
Matthew Snoddy, 24, an employee at Earl’s 377, said he was disappointed, but not surprised, after learning that his job had been furloughed. Snoddy, who began working at the Argyle pizzeria last year, said he received “no word” from ownership but was reassured by management that any layoffs would be temporary.
Most of his co-workers and other affected employees, however, found out via group chat or social media about layoffs, he said, and that it was not confirmed until his manager called everyone. Now that he is without a steady income to pay for utilities, credit card bills and groceries, he said he’s considering moving back with his parents.
“This is my last semester of grad school, and all of my classes are online, and I don’t get to walk the stage,” said Snoddy, a student at the University of North Texas. “Now, I’m out of a job, and I’m not sure my landlord is going to cut me any slack or give me any reprieve. I’m healthy right now, but if something happens, I’m screwed.”
According to a study conducted by personal finance site WalletHub, Texas has the highest share of population without health insurance coverage in the United States. Meanwhile, the state’s funding for public health emergency preparedness is ranked 48th, with only the states of Illinois, California and New York trailing.
For Luke Sampeck, a former employee at LSA on the downtown Square, the announcement of layoffs Saturday afternoon was not surprising. He said once restaurants like LSA were restricted to takeout options only, the writing on the wall became clear. As sales continued to drop, he said, he was notified of his furlough.
“We had less sales for a whole day than we regularly have in an hour,” said Sampeck, 33. “We were sent a message saying that the company had closed for the foreseeable future — which, while it does impact me financially, I think it was the most responsible thing to do in the midst of a viral pandemic.”
Sampeck, who is expecting a child in May, said he has filed for unemployment and is considering other avenues for income, such as teaching guitar or banjo via Skype. He said his main concern, however, was putting his pregnant girlfriend at risk, and that he would rather make a few financial sacrifices than to take that chance.
For Knutson, while the threat of permanent closure looms over the restaurants as the outbreak persists, the expectation is to rehire affected employees once the dust settles. And while the restaurant and food service industry remains in a state of turmoil, he said his concern is ensuring the safety of his staff and the community.
“We needed something to come back to, and the best decision was to close down and follow government regulations,” Knutson said. “And as the landscape changes, discussions have been: How do we not spread COVID-19? How do we get people paid? With small business loans, we don’t know how or when to access it.”
On Sunday, Texas Comptroller Glenn Hegar referred to the state of the economy as “the current recession,” according to The Texas Tribune. And while massive hits to multiple industries are expected, Hegar said the state would not push back monthly sales taxes for restaurants, citing the need for revenue to keep hospitals operating.
As the situation evolves, Knutson said the plan is to reopen restaurants once people are ready to come out.
“When the totality of the economy begins to rebound and people are able to come back out and spend money, I think they’re going to come back stronger, and we’ll be prepared,” he said.