Philz Coffee to Lay Off 180 Employees Due to COVID-19

Philz Coffee is laying off roughly 180 employees across the country due to the COVID-19 pandemic, management of the cafe chain announced to staff Friday night.

"The severity and duration of the pandemic has been worse than Philz reasonably anticipated, and the company now must proceed with layoffs it hoped to originally avoid," the company wrote in a mass email to laid off workers. The company said it had roughly 800 employees before the layoffs, which are scheduled for the week of July 15, in its cafes located in San Francisco, Southern California, Chicago, Washington D.C. and beyond.

The lost jobs come on the heels of weeks of turmoil for the Bay Area-based coffee chain, with more than 100 employees organizing to protest Philz' handling of worker safety during the pandemic and skewering its reaction to the Black Lives Matter movement. Staff posted anti-Philz leaflets across downtown San Francisco and circulated that messaging on social media.

KQED spoke to roughly a dozen employees, some of whom were laid off, and some of whom still work for the company and spoke under condition of anonymity, who described the brewing backlash against Philz and its CEO, Jacob Jaber.

In particular, staff pushed back against Philz offering discounts on its coffee to police officers, a practice the chain has offered to all first responders since before 2010, at least, which especially galled them considering Philz supportive Black Lives Matter messaging on social media.

Philz will no longer offer discounts to the police or any group, save for its own employees, starting in August, the company confirmed.

Barista Maiya McQueen worked at the Folsom and Beale Street Philz until she was laid off, Friday. She is Black and felt her words were not respected by management at a time when Black voices, in particular, should be heard.

"I've been super vocal about holding the company accountable for being anti-Black since their first statement about Black Lives Matter went up, and have been in multiple meetings with leadership where I was blatantly disrespected (and) disregarded," McQueen said.

Staff also skewered the company for choosing to keep its locations open after employees tested positive for COVID-19 in San Francisco and locations in other cities, among other safety practices.

Jacob Jaber, Philz' CEO and son of the coffee chain's founder, Phil Jaber, said this was a difficult time for his company, but that he is trying his best to listen to his employees.

Regarding the broad concerns raised by his staff, Jaber said, "This is an opportunity for us to strengthen our culture, we’ve been actively working on that."

COVID-19 and coffee

Lauren Hartz started work at Philz Coffee in Santa Monica in early 2019, and was laid off Friday. At first, she was impressed with the company's commitment to strict safety guidelines when her location reopened in April, after shelter-in-place restrictions began to loosen up.

"We wore gloves at all times, and were provided paper masks by the company once masks were mandated in Los Angeles County," she said.

But by the end of May, the company's practices changed. Citing advice from One Medical, Philz management told its employees it was now safe to work more closely together at work stations as long as employees washed their hands, wore gloves and wore face masks.

Hartz said Philz told employees “that the store practices were incredibly safe, but we kept seeing evidence to the contrary.”

In particular, Hartz said her fellow Philz staffers in Southern California were scared to learn some of their colleagues in San Francisco tested positive for COVID-19. Philz staffers like Rowan Allen helped spread the word to baristas across the country.

Allen worked at the Ocean Avenue Philz Coffee near City College of San Francisco, and was also laid off Friday. Allen verified that staffers communicated about the positive cases with screenshots of messages from other baristas over the last month.

Philz tried to keep too many people working to be safe, Allen claims, which did not allow for workers to maintain an appropriate distance from one another. Allen says the chain also "forced" employees to accept cash for in-person orders, despite publicly saying they would only accept mobile phone orders.

"Philz has tried to maintain maximum productivity while sacrificing safety," Allen said.

Jaber declined to verify to KQED whether or not baristas at San Francisco Philz Coffee locations contracted COVID-19, citing health privacy laws, but did say the company informs baristas when a particular location with a case is confirmed.

He also pushed back on claims that his coffee shops were unsafe.

Jaber also said an "ample supply" of personal protective equipment is provided to staff at all locations. Employees are granted three weeks of pay if they have COVID-19 or are impacted by it, he said, "so people don't feel pressured to come to work if they're not feeling well."

His cafes are then closed for a "deep cleaning" and are reopened with staff from other stores when a COVID-19 case is reported there.

"We take safety extremely seriously and always err on the side of caution," Jaber said.

No coffee for cops

In a Facebook post made by Philz coffee ten years ago, the company wrote "Are you a Fireman? Paramedic? Police Officer? If so, you can start enjoying a 20% discount on your cup of Philz! This is our way of saying thank you! Cheers!"

Most recent social media references to offering police officers discounted coffee have been scrubbed from Philz accounts, however. Now that it is ending, Philz current and former baristas are critical of Jaber for ending all discounts, instead of those just for police.

More than 100 Philz employees across the United States organized on social media to demand change not only for the company's COVID-19 practices but for its long-standing discount for police officers and other first responders.

"Philz Coffee employees in Costa Mesa and San Francisco were fired July 2 and July 3 after expressing their views against police brutality and murder of Black folk," one of the baristas' posters claims.

McQueen, the San Francisco barista who demanded change from Philz Coffee before she was laid off Friday, was repeatedly rebuffed by Jaber in emails she shared with KQED.

While he said in those emails that he wanted to spend time listening to all of his baristas before taking further action on Black Lives Matter, McQueen pushed him to finally end the police discount and to make donations to Black Lives Matter organizations, hire Black people into leadership positions and institute implicit bias training.

By June 10, Jaber said they would create an "equality and inclusion committee" within Philz, and later announced the end of all discounts to first responders.

McQueen said she felt "every interaction I had with him felt like a reminder that he didn't care about my life," and that his words to support Black Lives Matter feel performative.

Jaber said "I don't agree with those opinions, but I respect them."

One month later, McQueen was laid off, along with many of the Philz staffers who critiqued the company's policies. They allege Philz targeted them specifically.

"Absolutely not. Absolutely not," Jaber said of the accusation. "Unfortunately, I can’t go into details from a confidentiality standpoint, but this is a layoff including many, many, many, many people. It was one of the hardest decisions we had to make.”

“We take it extremely seriously,” he said.