AP – Wendy’s said on Friday it’s planning a restructuring and possible corporate layoffs in an effort to speed decision-making and invest more in new restaurant development.
The news comes just a week after rival McDonald’s announced a similar corporate reorganisation, also with plans to accelerate restaurant openings and improve efficiency.
McDonald’s said it will communicate more details on layoffs to employees by April 3; Wendy’s didn’t give a date.
Dublin, Ohio-based Wendy’s, the third-largest United States (US) burger chain after McDonald’s and Burger King, said on Friday it expects its full-year revenue will rise 10.5 per cent to USD2.1 billion in 2022. That would be higher than Wall Street’s expectations. The company plans to release its fourth-quarter and full-year earnings on March 1.
Wendy’s President and Chief Executif Officer Todd Penegor said during a conference call with investors that the company is starting its reorganisation from a position of strength, with 12 consecutive years of growth in global same-store sales, or sales in restaurants open at least 15 months.
The US business accelerated in the fourth quarter with promotions like a peppermint-flavoured Frosty and a USD5 Biggie Bag, which combines a sandwich, chicken nuggets, fries and a drink.
But Penegor said Wendy’s needs to focus more on global store growth and digital sales.
Wendy’s has nearly 6,000 restaurants in the US and just over 1,000 in 31 foreign countries.
Penegor emphasised that Wendy’s will narrow its focus to traditional stores, not to-go only options or other experimental designs. He also wants the company to continue its momentum in the fast-growing breakfast segment which it reentered in 2020 and improve store operations.
“As you take some layers out of the organisation and allow us speed of decision-making, it can drive focus, it will drive efficiency, it’ll drive productivity,” he said.
Wendy’s shares rose six per cent to close at USD23.08.
Wendy’s announced on Friday that it eliminated the job of Kurt Kane, its US president and chief commercial officer, who will be leaving the company. The company’s chief accounting officer and a senior vice president Leigh A Burnside also announced her departure.
The company also said its board authorised the repurchase of up to USD500 million in stock and doubled its quarterly dividend to 25 cents per share.