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Café Tropical closed 8 weeks ago. Employees say they're still missing thousands in pay

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Café Tropical closed 8 weeks ago. Employees say they're still missing thousands in pay

Almost two months after Silver Lake coffee shop Café Tropical shut its doors, former employees who worked there say they are still missing hundreds or thousands of dollars in final paychecks that never went through.

The nearly 50-year-old Sunset Boulevard restaurant closed suddenly in late November as debts and a bitter family dispute ravaged the company that owned the Cuban coffee shop. But the out-of-the-blue decision to close left baristas and cooks out of work and missing paychecks they were still owed.

“It’s sad the way they just threw us away,” said Miguel Alarcon, 44, a barista who worked at Café Tropical for a dozen years until it closed on Dec. 1. “I told them I have kids, I have a family. … You have to pay me.”

Alarcon and other employees said that problems began at Café Tropical months before the shuttering. Checks to employees were bouncing and vendors were complaining about not getting paid.

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The issues came amid a lawsuit that owner Daniel Navarro’s mother filed against him in 2022. Gladys Navarro claimed in the suit that her son illicitly used money from the family business to fund Café Tropical. Daniel Navarro has failed to pay his mother and sister more than $350,000 he owes in connection with the suit, according to court documents.

The dispute left the workers in the lurch.

Alarcon is owed about a week of pay, amounting to around $900, he said. Other employees are owed even more. Another woman at the company was missing three paychecks, Alarcon said.

Jasmine Perez, who started at Café Tropical in September, said she was owed about $1,000. By the time she started at Café Tropical, issues already abounded.

“The first thing someone asked me was did your check go through?” she said. “It just became an absolute nightmare to ever get paid on time. There would be times where I’d be missing paychecks for two consecutive pay periods. It was very uncomfortable to try to ask for the money you already earned.”

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A group is raising money on GoFundMe to try to pay employees who have struggled to get answers from the owner. Ciara Keane, a Silver Lake resident who organized the GoFundMe, said Navarro changed his number after the closure.

“Employees are still out of work and are having difficulty finding employment. They’re in need more now than ever,” Keane posted on GoFundMe.

The group has raised nearly $10,000, but says it still needs more than $50,000 in additional contributions to pay the 33 employees who lost their jobs and had their final paychecks bounce.

The goal is to pay the employees the $1,000 many are owed as well as another $1,000 for the time they were unemployed after the closure.

“I really wanted [the staff] to be able to feel how much the community loved and supported them, even though they didn’t get the same support from Daniel,” Keane said.

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Keane moved to Los Angeles from Miami four years ago and although she is not Cuban, Café Tropical reminded her of the Cuban culture of the city she grew up in.

She also recognized the important role that Café Tropical played for the sober community as well as for older generations of Silver Lake residents who saw the restaurant as one of the last vestiges of the pre-gentrification days in the trendy neighborhood.

Keane and her friends printed out posters that link to the GoFundMe across Silver Lake, Los Feliz and Echo Park, but they still have not been able to raise enough money to make all the employees whole.

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How Energy Prices Are Driving Demand for Solar Panels and Heat Pumps

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How Energy Prices Are Driving Demand for Solar Panels and Heat Pumps

Across Europe, the lesson from an old proverb just might be taking hold: Fool me once, shame on you; fool me twice, shame on me.

For the second time in under five years, Europe is contending with an energy crisis set off by a war. Europeans have responded to the price shock by rushing to line up heat pumps, solar panels and electric vehicles. They are hoping to lower their bills and reduce their reliance on imported fossil fuels.

In March, the first month of the war in the Middle East, more than 344,000 electric vehicles were registered across Europe, over 40 percent more than a year earlier, according to the European Automobile Manufacturers’ Association. Solar panel sales for Britain’s biggest power company, Octopus Energy, jumped 50 percent. And in Germany, inquiries about residential solar systems doubled compared with recent months, according to E.ON, an energy company.

Over the first three months of the year, about 575,000 heat pumps were sold in 11 large European countries, up 17 percent from a year earlier, the European Heat Pump Association said. The increases were particularly large in France, Germany and Poland.

For Heizma, an Austrian company that installs heat pumps, solar panels and other residential electrification services, sales in March and April broke records.

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Since the war stopped a vast majority of fuel shipments through the Strait of Hormuz, the price of European natural gas, which is relied on to heat homes and power factories, has risen about 40 percent.

As prices spiked, interest in alternative energy supplies kept rising. Michael Kowatschew, a founder of Heizma, said customer inquiries were up 20 percent. Many of them invoked the importance of “resilience” and “European sovereignty.”

Russia’s invasion of Ukraine in 2022 was a jolt for Europe, which had been dependent on Russia for critical supplies of energy. European governments turned to other gas and oil exporters, including the United States.

Europeans are noticing “more and more how dependent we are not only on fossil fuels but, through fossil fuels, on other countries and other regions,” Mr. Kowatschew said.

The European Union has spent an additional 24 billion euros on energy imports in under two months, said Ursula von der Leyen, the president of the European Commission.

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“Households are now seeing that they are only one Trump-ignited war away from very expensive tank refueling or heating bills,” said Elisabetta Cornago, an energy and climate policy expert at the Center for European Reform.

This “shock-awareness factor” means that demand for electric vehicles, heat pumps and solar panels is likely to keep rising, she said.

Demand has increased even as European governments have started to cut taxes on energy bills and diesel and gasoline at the pump to shield households. The costs of solar panels and electric vehicles, still out of reach for some households, are becoming more affordable. Last week, Volkswagen, Europe’s largest automaker, revealed a new electric vehicle model with a starting price under €25,000 (about $29,000), more than 25 percent below a comparable VW popular model.

In Britain, the government said it would allow the sale of plug-in solar panels within the next few months. These devices, which can be attached to a balcony, can help curb energy bills and don’t require the more expensive installation of rooftop panels. They will be widely available in supermarkets and online.

In the meantime, rooftop solar has become more popular. Danny Hirst, the managing director at the Green Way Solar, which installs solar panels in England, has noticed a sharp increase in interest. Last fall, his company was receiving about 10 inquiries a week. Now, it sometimes gets 20 in a single day, he said.

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“The general feeling that we’re hearing from clients now is that they’re just getting fed up with the uncertainty of energy prices,” Mr. Hirst said.

But will the interest be sustained? Companies and business groups said it was too soon to know.

For customers, there’s red tape. It can take weeks or months, partly because of regulatory approvals, for a customer to go from deciding to buy a heat pump or solar panels to installing them.

Then there is the push-pull issue of government policies over financial incentives or subsidies, which can drive consumer demand but cause it to taper if they are not designed properly.

Since the war started, countries across Europe have already put in place short-term measures to lower energy costs — more than €10 billion worth, according to an estimate by Bruegel, a think tank in Brussels.

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The measures, such as tax cuts on gas at the pump and electricity bills, are predominately aimed at large parts of the population. Experts said governments should target their assistance to the most vulnerable households, while spending more to subsidize low-carbon energy.

This has echoes of the crisis from 2022. At the time, Europe had suddenly shifted away from Russian gas imported via pipelines, a prominent source of fuel. Energy prices rose sharply. Demand for electric vehicles, solar panels and heat pumps jumped.

But when Europe found other sources of natural gas and prices dropped from their peak, interest in renewable technologies waned. Meanwhile, governments had spent hundreds of billions of dollars to shield households and businesses from high energy costs, further reducing the urgency for households to switch to renewables, some analysts said.

Simone Tagliapietra, an energy and climate policy expert at Bruegel, said the lesson for policymakers from 2022 was that they should increase their support for low-carbon technologies, not broad based-measures that cheapen energy from oil and gas. The moment, he said, presents an opportunity for governments.

“We are facing a full-fledged oil and gas crisis,” Mr. Tagliapietra said.

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At the same time, history shows that financial incentives needed to sustain consumer interest in technologies like solar panels must be consistent.

Mr. Hirst of the Green Way Solar has been in the solar industry for nearly a dozen years and has experienced the market’s ups and downs. There was a boom right after the 2022 crisis, he said, but then sales dropped. The promise of subsidies drove up interest in renewable technologies, but consumers then waited to make sure they received a subsidy before deciding to install solar panels or heat pumps.

There is a risk that this could happen again.

In Austria, demand for heat pumps dropped in the first three months of this year when some government funds for subsidies ran out.

Mr. Kowatschew at Heizma, the Austrian installation firm, said he was cautious about expanding too quickly. The company was established only two years ago. Its focus is on finding ways to make the installation process faster and more efficient so that workers can outfit two heat pumps a week instead of one, he said.

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Still, business is good. Heizma made about €2 million in revenue in April, he said.

“Everyone now knows electrification makes sense,” he said. “It makes a lot of sense to switch to heat pumps, to solar and green electricity.”

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California tech company Cloudflare to lay off more than 1,000 workers, cites AI

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California tech company Cloudflare to lay off more than 1,000 workers, cites AI

Cloudflare is laying off 20% of its staff, the latest technology company to announce big cuts as it uses more artificial intelligence-powered tools.

The San Francisco web performance and cybersecurity company said it was getting rid of 1,100 people.

“The way we work at Cloudflare has fundamentally changed,” Chief Executive Matthew Prince and Chief Operating Officer Michelle Zatlyn told employees in an e-mail. “We don’t just build and sell AI tools and platforms. We are our own most demanding customer.”

It is the latest tech company this week to announce massive layoffs as tech workers embrace the use of AI agents to perform tasks such as generating code more quickly. Coinbase said Tuesday that it would cut 14% of its workforce, or roughly 700 workers. PayPal is reportedly planning to slash 20% of its staff.

Other companies such as Meta, Block and Oracle have announced layoffs this year. From January to April, U.S. tech employers announced 85,411 job cuts, up 33% from the same period last year, outplacement and executive coaching firm Challenger, Gray & Christmas said Thursday.

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Cloudflare’s email, which was published on its blog, said that in the last three months, its use of AI has jumped more than 600%. Employees in various roles in engineering, HR, finance and marketing are running “thousands of AI agent sessions each day to get their work done,” and the company has to be “intentional” as it prepares for the “agentic AI era,” the email said.

Cloudflare executives added that the company is hoping to avoid further major layoffs.

“We are making these changes now because making smaller, repeated cuts or dragging a reorganization out over multiple quarters creates prolonged emotional uncertainty for employees and stalls our ability to build,” the email said.

The company estimates that severance and other restructuring will cost between $140 million and $150 million for 2026.

Cloudflare didn’t say how many of those cuts will be in its San Francisco office. The company has offices in other parts of the world, including Asia, Europe and the Middle East, according to its website.

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As of December, Cloudflare had 5,156 employees.

Cloudflare announced job cuts the same day it reported its first-quarter earnings. The company’s revenue jumped 34% year-over-year to $639.8 million in the first quarter. It posted a net loss of $22.9 million.

But the company’s forecast for the second quarter fell short of Wall Street’s expectations. Cloudflare projected revenue of $664 million to $665 million for the second quarter, which was lower than the $666 million Wall Street anticipated.

Cloudflare’s stock dropped roughly 18% to $209 per share in after-hours trading.

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Why Stocks and Bonds Are Responding Differently to the Iran War

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Why Stocks and Bonds Are Responding Differently to the Iran War

The unique global status of the U.S. dollar and financial markets, and the strength of the U.S. economy, have enabled the government to retain its current rating. “A large, dynamic economy, the dollar’s reserve-currency role and the depth and liquidity of U.S. capital markets are key sovereign rating strengths,” Fitch said. But a variety of “governance” issues under the Trump administration, as well as the conflict in the Middle East, along with persistent and widening budget deficits, have challenged that credit rating.

Nonetheless, U.S. Treasuries have attracted global investors as a “safe haven” during the conflict. Other countries, like Britain, don’t have that status now. British 30-year government bonds, known as gilts, have reached their highest level since 1998. And Britain’s benchmark 10-year bond yield was close to 5 percent, a premium of more than 0.6 percentage points above the equivalent Treasury.

Major world central banks have responded defensively to these financial storms. As I wrote last week, the Bank of Japan, European Central Bank, Bank of England and Federal Reserve have all decided to take no action on their key interest rates because of the dual risks posed by rising oil prices resulting from the war with Iran: There are heightened risks of both runaway inflation and throttled economic growth.

That dilemma continues. Kevin M. Warsh, nominated to succeed Jerome H. Powell as Federal Reserve chair, has spoken frequently of the need to trim interest rates but the markets are skeptical. They project no Fed action on rates through December 2027 as the most likely outcome, with a greater possibility of interest rate increases than of reductions, according to futures prices tracked by CME FedWatch.

In short, central banks, which control the shortest-duration interest rates, and the bond market, which sets longer rates, view the economic environment with a jaundiced eye. There is a range of possibilities, from prosperity in many developed markets to chaos if the conflict in the Middle East widens. Fixed-income markets tend to focus on risks more than on the potential for windfall profits that the stock market cherishes.

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