'Ghost Kitchen' Operators Look to Add LA Jobs in Hard-Hit Restaurant Industry
by: Lou Hirsh | CoStar News | April 13, 2020
At least one small section of the restaurant industry is expanding in Los Angeles: "ghost kitchens," or the commercial kitchens designed to make carry-out and delivery food only.
C3, a restaurant venture formed earlier this year by mall giant Simon Property Group, Accor Hotels and SBE Entertainment Group to develop delivery-only ghost kitchens, is ramping up hiring with plans to add 500 workers in the Los Angeles area.
The announcement to grow its workforce comes as California filings show restaurants and hotels have been among the businesses hit hardest by layoffs in the state amid the coronavirus pandemic, which has shut down restaurant dining rooms nationwide to help prevent the spread of the deadly virus. But it's heightened the need for take-out food as people stay home.
"We are living in ever-changing times and have seen the hospitality industry face unprecedented challenges nearly overnight,” said SBE founder and CEO Sam Nazarian in an April 9 statement announcing SBE's launch of its recruiting for 500 positions in the Los Angeles region geared to C3's delivery-only kitchens.
C3, which stands for "Creating Culinary Communities," was formed earlier this year by the global retail and hospitality companies in response to what was already a growing trend toward food being ordered in advance for takeout or delivery by time-strapped consumers, either online or through mobile apps. This ecosytem has been boosted by in-house and third-party delivery services being used by restaurateurs increasingly setting up production kitchens — known in the industry as ghost kitchens or ghost restaurants — that make food only for delivery or takeout.
The combined C3 venture is planning to have more than 142 ghost kitchens open nationwide by the end of this year, spanning multiple existing and in-development brands.
The L.A. area hiring is being spearheaded by Beverly Hills, California-based SBE Entertainment Group, led by Nazarian, a prominent philanthropist and developer of hotels, restaurants and nightclubs. Nazarian's company has established previous ghost kitchen and delivery concepts in the Los Angeles area, including Umami Burger, Sam's Crispy Chicken, Krispy Rice and the upcoming Plant Nation.
Company officials did not immediately respond to requests from CoStar News for additional comment. In the statement, Nazarian said SBE and C3 are encouraged by the previous growth of their existing delivery-only platforms and are working to fill newly created jobs in areas including digital marketing, accounting, finance, development, construction, delivery and food preparation.
SBE officials said the company has so far maintained full employment for most of its Los Angeles workforce during the current pandemic, though some have been furloughed temporarily. The company is giving priority in its upcoming C3 hiring to workers who were furloughed from its other restaurant and nightlife brands.
Nazarian recently told Forbes magazine that SBE has laid off 7,000 workers at its 28 hotels and 200 restaurants and nightclubs worldwide during the pandemic. The company has converted some currently shuttered U.S. locations into temporary distribution centers for care packages being given to its laid-off workers.
California's major visitor-focused cities, including Los Angeles, San Diego and San Francisco, have been particularly hard hit by hospitality-related layoffs as tourism has ground to a halt, hotels and conference centers remain empty and restaurant dining rooms stay shut during the pandemic.
Layoff notices filed with the California Employment Development Department through April 8 show restaurants and hotels among the most frequent filers, especially since mid-March when travel and stay-at-home restrictions were first imposed by government leaders.
Several national and regional restaurant companies have filed large-scale layoff notices listed as permanent, including those impacting 1,358 workers at San Diego-based Cohn Restaurant Group; a total of 528 at six Southern California locations of Karl Strauss Brewing Co.'s brewpub-restaurants; and 319 at three regional locations of dining and entertainment center Punch Bowl Social.
Layoffs at large and small California hotels are mostly listed as temporary, led by 968 at the Ritz Carlton-J.W. Marriott complex in downtown Los Angeles; 774 at the Palace Hotel in San Francisco; and 688 at the Manchester Grand Hyatt in San Diego.