Tuesday, February 19, 2008

Your pink slip is showing

Today brought news that Lone Star Steakhouse had laid off 1,500 full and part-time workers as a result of closing 26 restaurants. About two weeks ago, Brinker International eliminated 125 corporate jobs. CEO Wally Doolin was among the 13 percent of Buca Inc.’s employees who lost their jobs through cutbacks that took full effect Feb. 1 (though Wally continues to serve as board chairman of the Buca di Beppo parent). In early December, Rock Bottom Breweries cut its support staff by 19 percent. Clearly manufacturing, media and financial services aren’t the only sectors of the economy to hack their payrolls in recent days. Their axes just whistled louder because of the scale.

The few foodservice economizers to snag headlines were the ones that made a public confession. No doubt plenty of other restaurant home-office staffers were quietly put out of work after their companies were acquired in the ongoing swap-a-rama. The euphemism for that scenario is “rationalization,” were the buyer eliminates redundancies in finance, marketing, administration, HR, even payroll management itself. Why bother to buy a company if you can’t wring some economies and redundancies out of the combined operations?

Others were likely let go with a dash of stealth because of the general economic malaise that’s hanging on like a mooching relative.

I wish I were starting a restaurant company, because the pool of available talent is richer than a Britney Spears blooper tape. It’ll almost certainly deepen as more deals are done, more expansion plans are scrapped, and tougher times keep bean counters scrambling to find new ways of making their numbers.

It’s a shame to see such brainpower squandered. It’s especially galling when you consider that the industry will likely whine about the dearth of middle and senior-level executive candidates when the trade pulls out of its malaise in a year or two. Instead of fire-hardening their skills and judgement, the would-be leaders will lose precious time—if the industry doesn’t lose them altogether.


  1. Just last week the first Baby Boomer received her first benefit payment from the Social Security Administration. What this ultimately means is that nearly 2,000 boomers a day will be eligible for Social Security and may be enticed to gobble up any meager benefits that are available. Many statistics show that Social Security will be broken by 2041. This coupled with the fact that by 2010, there will be not enough Gen Xer's and Gen Y employees to fill the void left by the wake of Boomer leaving the workforce.

    The restaurant industry is really doing itself a short term disservice with more long term negative gains. You are correct that many of these "rising" stars in the mid-level and pre-executive level professionals will likely leave our industry. What will be more revealing is if many of these "players" will be allowed to come back to the sandbox in a couple of years.

    It has been my experience that this industry can be a bit endogamic and that once you have left the industry, it is not likey that you can come back - especially at the mid and pre-executive positions.

    A great read that talks about the upcoming employment crisis is "Impending Crisis: Too Many Jobs, Too Few People" by Roger Herman, Thomas Olivo and Joyce Gioia. I think if more companies would read that book, they would think twice before letting someone go.

  2. I think this is a case where non-restaurant industry will be the winner in terms of talent: retail companies, customer-service oriented delivery giants like UPS/FEDEX, etc should and will probably all take a look out of their self-imposed boxes and gobble up the multi-tasking, used-to-long-hours-and-hard-work, able-to-manage-a-diverse-group-of=staff experts such as us restaurant professionals.