On March 15, 2021 the Ontario government provided a lockdown directive for restaurants to close for in-house
Question:
On March 15, 2021 the Ontario government provided a lockdown directive for restaurants to close for in-house dining. You are the HR Advisor for the Bella Mercato, a high-end restaurant with 3 locations in Toronto (Financial District, King West, Yorkville). It has specialized offerings of Italian food that no other restaurant in Toronto has with respect to a white truffle they serve and source directly from Italy. They are the only restaurant in Toronto with the rights to purchase this. Bella Mercato also sells prepared specialty items like ricotta fennel lasagna that patrons can purchase from the freezer. They’ve also recently tried freezing their pizzas partially cooked.
Patrons are phoning daily asking for re-opening plans and alternative services such as a private chef in their homes. At each location you have a chef, a sous chef, a line cook, 2 dishwashers, 7 servers, a sommelier and a host. You have already submitted and qualified for a $40,000 interest free business loan from the government. Furthermore, you also have an abundance of white truffle pasta that was just made last week and will expire in 3 days. The owner of Bella Mercato has told you they almost lost their locations during the March 2020 shut down and this can’t happen again. She is asking you to prepare a restructuring plan to make sure they get through this month period.
This is your first restructuring process and surely your first pandemic. The owner has asked you to send her a report in advance of an emergency zoom meeting. The request is to reduce costs by 30% for April 30 2021 and staff employed where possible. Your approach to this meeting is very practical and creative. You want to make sure that any process that is used for restructuring is fair and transparent with minimal impact on existing employees and patrons. In preparation for this meeting you will provide alternatives that should result in savings that will allow you to stay in business and re-open when permitted. You do not want to be known as the “evil HR person” who cuts jobs and forced people to lose their jobs
A little bit about the staff. This information exists across 3 locations (Hint: Multiple x3)
Positions | Number of Incumbents | Salary Info |
Host | 1 | $35,000 annually |
Servers | 7 | $60,000 annually |
Sommelier | 1 | $75,000 annually |
Dishwashers | 2 | $15/hour 35 hours weekly |
Sous Chef | 1 | $55,000 annually |
Line Cook | 1 | $50,000 annually |
Chef | 1 | $80,000 annually |
Additional Monthly Financial Information
Expense | Revenue | |
Rent | $20,000/monthly | |
Hydro | $3,000/monthly | |
Food and Alcohol Costs | $50,000 / monthly | $180,000/monthly |
Internet | $500/monthly | |
Cleaning Supplies | $2000/monthly | |
Misc | $1000 | |
Government Loan | $40,000 (interest free – needs to be paid back over 5 years) |
Required
- Identify the criteria you will use in deciding how to downsize.
- Identify any further information you require or questions you would ask. Then insert that information if required to make your decision. Indicate all assumptions.
- Provide 30 % downsizing scenario for management’s approval with financial calculations and risk
- Outline the steps and timing you recommend implementing these actions
Expert Answer:
Criteria for Downsizing The criteria for downsizing that I would use in this situation include the following 1 Financial sustainability Any downsizing must result in a cost reduction that allows the r... View the full answer
