VOL. 123 | NO. 223 | Thursday, November 13, 2008
Yum Brands Cutting Several Hundred Jobs
By BRUCE SCHREINER | Associated Press Writer
LOUISVILLE, Ky. (AP) - Fast-food company Yum Brands Inc. said Wednesday it will eliminate several hundred jobs and shift up to a couple hundred more as part of a restructuring of its sluggish U.S. business.
The restructuring is part of Yum's strategy to sell more company-owned stores to franchisees, spokesman Jonathan Blum said. The operator of KFC, Taco Bell and Pizza Hut said last month its third-quarter U.S. operating profit fell 16 percent, due to surging commodity prices and lagging KFC sales.
"We believe this will enable us to operate more effectively and improve our cost structure," Blum said in detailing the cutbacks in a phone interview.
The moves won't affect Yum's high-growth international operations, led by its robust China division. Strong overseas sales have more than offset sluggish U.S. results.
Blum said that several hundred jobs will be eliminated at Yum's Louisville operations as well as at Taco Bell's headquarters in Irvine, Calif., at Pizza Hut's headquarters in Dallas and in field operations nationwide. An unspecified number of cuts will be achieved by not filling open positions, he said.
Also, up to a couple hundred more positions will be shifted from Yum's corporate headquarters in Louisville to the company's brands, Blum said.
Employees were notified of the changes Tuesday and Wednesday, he said.
Currently, about 20 percent of Taco Bell, KFC and Pizza Hut stores in the U.S. are company-owned, Blum said. Yum's goal is to cut by about half the number of company-owned KFC and Pizza Hut stores while maintaining about 20 percent company ownership of Taco Bell restaurants, he said.
Yum's brands also include Louisville-based Long John Silver's and A&W All-American Food.
Company executives predicted last month that Yum would see at least 10 percent earnings-per-share growth next year on the strength of fast-paced restaurant openings overseas, improved U.S. cost management and sales growth. Yum expressed confidence in achieving 5 percent U.S. profit growth in 2009.
Yum shares fell 53 cents to $25.34 in afternoon trading.
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