KFC cuts corporate workforce
KFC Corp. has laid off an undisclosed number of corporate support staff for the chain of more than 5,000 Kentucky Fried Chicken units in the United States.
KFC “made the difficult but necessary decision to reorganize KFC to reduce cost, maximize efficiencies and better reflect our current business needs,” Karen Sherman, the chain’s senior director of public relations, said in an emailed statement to Nation’s Restaurant News
“While we have increased investment in some positions, we also have eliminated others at our corporate offices and in the field,” Sherman said. “We are fully committed to dramatically improving our business performance with new product and marketing innovation and enhanced restaurant operations that will deliver a superior restaurant experience. We are doing everything possible to help support those affected by the reorganization in their transition.”
KFC, a division of Louisville, Ky.-based Yum! Brands Inc., has struggled to turn around negative same-store sales in the past year. Although the brand recorded a 1-percent gain in same-store sales in the United States in the first quarter of 2011, sales declined 5 percent and 3 percent in the second and third quarters, respectively. Yum is expected to release fourth-quarter earnings early next month.
While Yum and its domestic KFC franchisees have disagreed over marketing strategy — particularly over decisions to promote the brand’s Kentucky Grilled Chicken products, seemingly at the expense of franchisees’ ability to sell the chain’s Original Recipe chicken — Yum chief executive David Novak told investors last month that the company and KFC operators recently have achieved greater “unity of purpose” and could turn the brand around soon.
Novak added in a later interview with Nation’s Restaurant News that in the coming year KFC franchisees have agreed to invest in new kitchen equipment and increase their contributions to the brand’s national marketing fund from 2 percent of sales to 4.5 percent of sales.
In November 2011, KFC sister brand Taco Bell also reorganized, letting 30 unfilled positions remain vacant and laying off 75 people. Yum also cut some corporate staff positions in 2009.
Yum operates or franchises more than 38,000 restaurants in more than 110 countries.