As COVID-19 continues to hurt small-and-medium-sized businesses (SMBs) across America, San Francisco-based bubble milk tea store, Boba Guys, has announced that they had to lay off 90% of their staff in order to prevent drying up.
Boba Guys was founded by entrepreneurs Andrew Chau and Bin Chen in 2011, and has since taken pride in offering products of “next level quality.” Their outlets can be found in major cities including San Francisco, Los Angeles and New York.
In a Facebook post on Wednesday, Chau broke the news with a heavy heart.
“Yesterday was the hardest day of me and Bin Chen’s career. We had to let go of 90% of our team,” he wrote. “We hope most of the hourly workers return when we emerge from hibernation, but my heart is so heavy because most of our HQ team (marketing, catering, sales, operations, analysts, etc.) are gone after this week.”
Chau, who recently testified in a House Small Business Committee hearing titled “The Impact of Coronavirus on America’s Small Businesses,” explained that Boba Guys’ working capital has started to run dry.
“As I testified about, most SMBs (not VC-funded) have 2-3 months of working capital. That’s assuming a baseline run-rate. With businesses down 40-80%, that working capital is depleting right about … NOW!
In his testimony last week, Chau cited “misinformation and overblown media coverage” regarding COVID-19 as the primary contributors to the decline of patronage in Chinatowns and other AAPI enclaves. Contrary to such questionable sources, he cited NextShark as one outlet trying to shine a light on issues faced by the Asian American community amid the outbreak.
“This virus has no color. It has no ethnicity. It has no borders. COVID-19 is a respiratory virus, but it is fast-mutating into a social virus: xenophobia and marginalization of everyday American citizens,” Chau told the Committee on Small Business.
Boba Guys currently operates a total of 16 locations in the country, which will all suspend operations beginning on March 20.
“Small businesses are the last people to ask for help, especially because we pride ourselves on being self-reliant and scrappy,” Chau noted in his Facebook post. “I do not foresee a bailout like the airlines might get. How do you save 500,000 small businesses? How do you evaluate who lives and who dies? Much like the virus itself, we are forced to choose.”