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Foodservice

Subway Lays Off 300 at Corporate Headquarters

Staff reduction is latest in a series of big changes for the company
Photograph: Shutterstock

MILFORD, Conn. — Subway has cut 300 employees from its Milford, Conn., headquarters in the latest in a series of massive changes at the struggling sandwich giant.

A smaller workforce will enable the company to respond to changes more quickly, the company said.

“A reduction in workforce is never an easy decision, but streamlining and simplifying our business with a smaller and nimbler workforce will help us react quickly to the changing needs of the business,” said Alan Marcus, senior director of public relations for Subway. “We must do what we can to fully support our owners and our guests in every neighborhood in which we do business.”

Subway has been one of the leading fast-food brands in convenience stores for three decades. The first Subway restaurant located in a c-store opened in 1990. In May 2015, Subway opened its 5,000 c-store location in a Repsol gas station in Lima, Peru. Today, nearly two-fifths (38%) of c-stores in the United States have a Subway, according to Technomic. Of all fast-food brands, it ranked second only to Dunkin’ Donuts (43%).

“Our focus remains on ensuring Subway guests get great service and value at every restaurant they visit, our franchise owners get the full support and tools they need to help them grow and be successful and that we strengthen our overall business performance,” Marcus said. “In order to deliver on that strategy, a difficult decision was made to eliminate approximately 300 positions at our global HQ in Milford, Conn.”

Subway has been making a steady stream of changes at the company over the past several months, including the hiring of new CEO John Chidsey last November. Those changes have also included an overhaul of the company’s executive team, with several executives leaving the company, some of whom counted their tenure in decades.

Subway took control of its ad fund, added a new value offer and has tested everything from milkshakes to plant-based meatballs. It has also added several new executives in the process.

The company has been in a state of change because it has been in a decline for several years, a period marked by the end of its popular $5 footlong promotion and the shocking end to its famous ad campaign featuring Jared Fogle.

Subway’s franchisees, who operate each of the chain’s 23,692 U.S. restaurants, have closed more than 2,200 locations over the past two years. Since the chain’s unit count peaked at 27,103 locations in 2015, it has shrunk by 13%.

CSP’s sister company Technomic said last year that it expected Subway to fall out of the top five chains on its Top 500 ranking this year and finish with less than $10 billion in U.S. system sales for the first time since 2001.

Staff reductions have become a common tool for older restaurant franchises looking to speed decision-making or drive corporate changes. McDonald’s did so after former CEO Steve Easterbrook took over in 2015. Burger King did so five years earlier, after private-equity firm 3G Capital bought the chain.

This story was originally published by CSP sister publication Restaurant Business.

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