Burger King lays off 250 in purge at headquarters

By McClatchy Tribune Newspapers
Posted Dec. 7, 2010 at 6:11 a.m.

Burger King’s new owners continued their purge of headquarters Monday, dismissing a large number of workers there in an effort to catch-up with McDonald’s in the fast-food wars.

The Miami-based company announced 413 dismissals company-wide, including 261 in South Florida. Most of those jobs came from the No. 2 burger chain’s headquarters.

The company refused to say how many people worked at headquarters before the cuts, but in recent years Burger King put the number at between 500 and 700, according to Miami-Dade’s economic development agency.

“It’s significant news,” said Frank Nero, the Beacon Council’s president. “They’ve told us they remain committed to having a headquarters here. Obviously, a much smaller headquarters.”

The mass layoffs followed a more precise cut at the top, when seven senior executives lost their jobs in October.

Weeks earlier, 3G Capital, a private equity firm with Brazilian backing, acquired Burger King in a $4 billion deal and took the chain private.

The takeover launched speculation that 3G would follow the familiar pattern of private-equity investors: first acquire, then slash costs to make the acquisition easier to sell for a profit in the coming years.

“They often will cut deeper than they need to, then go back and fill in 1 8 open positions 3 8 . It is part of the private-equity way of operating, which is to say that over time companies become bureaucratic,” said Ron Paul, president of Technomic, a Chicago consulting firm specializing in the food industry. “It’s almost like starting over.”

While McDonald’s, the world’s top burger chain, has grown profits during the economic downturn, Burger King languished. McDonald’s recently reported 6 percent growth in restaurants open at least a year and Burger King said sales declined almost 2 percent worldwide during roughly the same time period.

Despite the cuts, Burger King wants to keep headquarters (inevitably referred to as “The Home of the Whopper”) in Miami.

“We are not going to cease being a major corporate presence” in Miami, said Jose Tomas, head of human resources and communications for Burger King. He noted Bernardo Hees, the new CEO, is about to close on a house in the area. “The bottom line is we’ve been here for 50 years,” Tomas said. “We’re committed to Miami.”

Tomas would not describe which jobs were eliminated, but said the cuts spread across all departments at headquarters and beyond. Though a company statement described the cuts as only 8 percent of the company’s South Florida workforce, that comparison included entry-level jobs at Burger King restaurants the chain owns across the region, a spokeswoman said.

The dismissed workers were told of the decisions Monday, then put on paid leave immediately, Tomas said. Burger King offered compensation packages of at least six months pay and benefits, he said.

Tomas said the cuts were needed to boost Burger King’s performance. “It’s no secret what the health is of the organization,” he said. “We want to drive efficiencies.”

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  1. Publicus Dec. 7, 2010 at 12:33 pm

    Gotta love those corporate bean counters. These outfist come in like locusts and leave a husk when they sell – but of course they make a profit.

  2. Ruth Dec. 20, 2010 at 1:00 a.m.

    Love my Burger King—all sandwiches, Don’t want to have to stop eating them,. Have been having trouble with the Ses. seeds on the buns and can no longer eat them, Do you do the sandwiches without seeds on the buns? Oh boy, I hope so!!