Given the short time left before the expiration of the PGWP, your friend's only option to stay in Canada and continue to work is for her employer to apply for an LMO.
http://www.hrsdc.gc.ca/eng/workplaceskills/foreign_workers/intstugrad.shtml
Because she is on a PGWP, if her employer is offering her a permanent position, the requirement to demonstrate recruitment efforts is waived.
"In cases where the employer is making a permanent job offer to employees who have completed the PGWPP for employment in a skilled occupation (within National Occupational Classification 0, A and B codes only), the employer will not be required to demonstrate recruitment efforts. It is recommended that the employer submit the application for an LMO approximately four months before the expiry of the Post-Graduation Work Permit."
The LMO will take time to process, and it will likely not be completed before the expiration of her work permit. She should wait until the 2 weeks before the work permit expires; if they haven't gotten a response on the LMO by then, she can apply for a new work permit without the LMO (ONLY IN THE 2 weeks prior to the expiration of the work permit).
http://www.cic.gc.ca/english/resources/manuals/bulletins/2010/ob152A.asp
For inland processing, the concurrent processing option will only be allowed for foreign nationals whose work permits will be expiring within two weeks. They must provide proof of a valid job offer, as well as proof that the employer has submitted a request to Service Canada for a new LMO. Applications will be initialized and the processing fee will be processed. Applications will be held for two months (TBC for CAQ) from the date of receipt, after which a determination to either refuse or approve the work permit will be made.
Application
http://www.cic.gc.ca/english/information/applications/extend-worker.asp
If she submits her application for a new work permit BEFORE the current one expires, she will be on "implied status" after it expires, until she gets a response from CIC (about 2 months). She can continue to work on implied status, as long as she remains in Canada. If the work permit is refused, however, she will have to leave Canada immediately.
(She could apply for restoration of status and change to Visitor, but then she can't work and won't make progress towards qualifying for PR).