Taco Bell Cuts 105 Jobs

Editor's note: This story has been updated with Taco Bell's annual systemwide sales figures.

Taco Bell Corp. is cutting 105 jobs across its system in the United States, including positions at the unit level and at its headquarters in Irvine, Calif., corporate officials confirmed Monday.

Thirty of those jobs represent the elimination of open, unfilled positions with Taco Bell, while the remaining 75 are layoffs of staff members. Taco Bell is a division of Louisville, Ky.-based Yum! Brands Inc. The quick-service Mexican chain operates or franchises about 5,600 locations.

"To win in this increasingly competitive marketplace, we've made the difficult but necessary decision to make some structural changes," chief executive Greg Creed said in a statement provided to Nation's Restaurant News. "We're committed to doing fewer things better, becoming more nimble, and providing our customers a better and more relevant Taco Bell."

Brand spokesman Rob Poetsch confirmed an earlier report that the layoffs affected all departments except food innovation and information technology.

"We are doing everything possible to ease the transition of those impacted, including generous severance, outplacement and financial planning services, and continuation of medical benefits," Poetsch said.

Yum! Brands chief executive David Novak has said Taco Bell's hopes for a sales turnaround depend on the chain's menu innovation pipeline, including what he called a breakthrough product that seeks to reinvent the taco. That is scheduled to roll out in the first quarter of 2012. Taco Bell's current promotion is the Triple Steak Stack, a premium flatbread sandwich.

Taco Bell has struggled to maintain sales growth in 2011, suffering bad press from a dismissed consumer lawsuit first introduced in January that questioned the ingredients in the chain's seasoned beef. Same-store sales were flat in the first quarter, before declining 5 percent in the second quarter and decreasing 2 percent for the Sept.3-ended third quarter.

According to Nation's Restaurant News' Top 100 census, Taco Bell had grown its systemwide sales steadily before the consumer lawsuit in January caused its current slump. For fiscal 2010, Taco Bell reported U.S. systemwide sales of $6.9 billion, compared with $6.8 billion in 2009 and $6.7 billion in 2008.

The brand's most recent personnel move was the hiring of Brian Niccol as chief marketing and innovation officer Oct. 13. He came to Taco Bell from sister brand Pizza Hut.

Taco Bell has been identified as Louisville, Ky.-based Yum's potential growth vehicle in the United States, as the 5,600-unit chain has the potential to reach about 8,000 domestic locations and still is testing a breakfast platform that would open up a whole new daypart for the brand. Yum also operates and franchises Pizza Hut and KFC.

Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN