Cheesecake Factory (NASDAQ:CAKE) has furloughed 41,000 hourly workers due to the impact of the coronavirus. The furloughed workers will keep their benefits through June 1. They will also be provided a free daily meal from the restaurants they previously worked in, according to an SEC filing.
Executives take a pay cut
In addition to sending its hourly workforce home, the restaurant chain's team has also cut pay to its CEO and a number of executive officers, and lowered cash retainer fees for its board of directors. Pay will also be cut for all "corporate employees and bakery administration employees by graduated amounts between 10% and 20%," according to the filing.
The company also included language in the SEC filing that explains its decision to not pay rent as of April 1: "Given the impact of governmental regulations and landlord decisions to close properties, considering the nature of our rent obligations and as part of ongoing efforts to manage our financial position and further preserve financial flexibility, we are not planning to pay rent on our leases for the month of April 2020 at this time. We are in various stages of discussions with our landlords regarding ongoing rent obligations, including the potential deferral, abatement and/or restructuring of rent otherwise payable during the period of the COVID-19 related closure."
The chain, like many others, has closed all of its dining rooms. Some of its restaurants remain open for delivery and curbside pickup.
An uncertain future
Cheesecake Factory, like many other businesses, does not know when it can return to normal operations. That makes the future uncertain for its employees and for the restaurant business overall.