Coronavirus forces Cheesecake Factory to furlough 41K workers

Expect huge job losses due to coronavirus: Economist

Wells Fargo senior economist Mark Vitner says American employment will plummet before the intensity of the coronavirus fades.

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The Cheesecake Factory has furloughed 41,000 hourly employees after curtailing service inside its restaurants to limit the spread of the COVID-19 pandemic.

The affected workers will be able to keep their benefits and insurance until June 1, according to a regulatory filing. They will also be given a daily complimentary meal from the restaurant.

The decision mirrors actions at restaurants and bars around the country, many of which have either halted operations or limited service to take-out and delivery, leading to a record 3.28 million unemployment-benefit claims in the U.S. last week alone.

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The Cheesecake Factory. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)

In response to the sharp drop in business, Cheesecake Factory CEO David Overton and other top executives are reducing their salaries by 20 percent, effective April 1. The company's board will also reduce cash retainer fees for its members by 20 percent.

Along with the furloughs, Cheesecake Factory said it's not planning to pay April rent on its leases, given the impact of decisions by government and landlords to close properties, and is in talks on rent-deferral programs. The move will give the company more financial flexibility amid curtailed sales, according to the filing.

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To date, the virus has infected more than 540,000 people worldwide, with the United States leading the world in the number of confirmed cases. Over 24,000 people have died, according to data from Johns Hopkins University.

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