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Published Mar 24, 2020

Rapid Response: Danny Meyer on the wrenching decision to do layoffs

Danny Meyer, founder of Union Square Hospitality Group, delves into the tough decision to lay off 2,000 employees during the pandemic, highlighting resilience, strategic planning, and compassion as key elements in the restaurant industry's survival and the role of enlightened hospitality in crisis management.
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Episode Highlights

  • Hospitality Framework

    shares how the principle of enlightened hospitality guided his decision-making during the crisis. This framework prioritizes stakeholders in a specific order: employees, customers, community, suppliers, and investors. He emphasizes that breaking this cycle anywhere disrupts the entire system, especially during challenging times like economic crises or natural disasters.

    The framework helps. But I don't go into any meeting knowing the answers. I often go into a meeting with a strong point of view. But I really have worked hard to surround myself with really smart people.

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    Meyer explains that while he enters meetings with a strong perspective, he relies on his team to bring diverse insights and make informed decisions 1 2.

       

    Layoff Strategy

    The decision to lay off 2,000 employees was a heart-wrenching but necessary step for to ensure the survival of Union Square Hospitality Group. He describes the process as akin to a business version of chemotherapy, where drastic measures are needed to preserve the company's future. Despite the layoffs, Meyer ensured that employees retained their health benefits and created an employee relief fund to support them.

    It's a mistake, probably, to start making exceptions on a group policy, but that doesn't mean you can't come up with another solution for the benefit of a human being.

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    He acknowledges the difficulty of maintaining compassion and communication during such a massive layoff, especially when face-to-face interactions are limited 3 4 5.

       

    Future Outlook

    Planning for the future amidst uncertainty, adopts a cautious yet hopeful approach. He prepares for various scenarios, assuming no government assistance while hoping for support. Meyer reflects on lessons from his father's business experiences, emphasizing the importance of learning from past mistakes to avoid similar pitfalls.

    I will certainly do everything I can to make sure we're there on the other side of this and that we thrive.

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    He stresses the need for businesses to freeze costs and retain employees to ensure a swift recovery post-crisis 6 7.

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