Philz to lay off 180, expecting sales to stay low
Philz Coffee will lay off over 180 workers, mostly in the Bay Area, due to the economic ravages of the coronavirus pandemic.
The San Francisco coffee roaster will primarily cut ties with baristas and team leads across the region and the state, according to a notice filed with the state’s Employment Development Department.
Some designer, analyst and content producer jobs will also be cut, the company said.
Philz told The Chronicle that the cuts were directly related to the economic challenges posed by the pandemic and faltering demand. The company said it plans to assist employees who want to reapply for jobs when demand returns to prepandemic levels and noted it had paid employees for scheduled shifts after the initial closures in March and covered health insurance costs.
The Chronicle reported the chain had begun pressing some furloughed workers to return to their jobs or quit, despite the ongoing risks of frontline work.
Employees affected by the layoffs were informed by email Friday that their last day would be July 15.
“As the repercussions of this pandemic continue, we are able to gain a better understanding of what we can expect from sales, which is materially divergent from where we were preCOVID19,” the company wrote to employees in the email, which was reviewed by
The Chronicle.
The company told employees Friday it was not comfortable opening cafes, which it operates in California and as far afield as the East Coast, to walkin business.
“With the longevity of the pandemic, and its impact, uncertain, it is unrealistic that Philz will be able to bring all furloughed Team Members back, and that continuing furlough status would only hold individuals back from pursuing other opportunities,” the company said.
Philz made the announcement before Gov. Gavin Newsom on Monday ordered every county in California to close indoor restaurants, shutter bars and close other businesses including movie theaters, wineries, zoos and museums.
The chain closed stores on March 17 as a safety measure, even though as an essential food business it could have chosen to stay open. It reopened most locations on April 8 after shifting to a nocontact, pickup business model.
Although Philz began to bring some employees back in recent months, the company told the EDD “the severity and duration of the pandemic has been worse than Philz reasonably anticipated,” and said the layoffs were unavoidable.
Businesses like Philz can open for togo orders, their business is highly dependent on customer routines that have been upended by the pandemic, according to Mike Cullom, national director of restaurant and hospitality consulting at Moss Adams LLP.
“These businesses are very dependent on habit, people stopping in for their morning cup of coffee,” Cullom said. With the pandemic disrupting almost every aspect of daily life, “people like you and me have to make an effort to leave our house and go to the coffee shop,” driving down sales, he added.