Krispy Kreme Eliminating 90 Local Jobs As Part of Restructuring

Today, we informed approximately 90 people at Krispy Kreme Doughnut Corporation that their positions are being eliminated. We deeply appreciate their contributions to the company and will assist them as much as possible during this difficult time by providing severance, 2017 bonus, and health and outplacement benefits. We are committed to managing this transition smoothly and will treat every employee with respect and dignity.

We have spoken with our employees for several months about the journey that Krispy Kreme Doughnuts is on to transform into a global company that delivers joy around the world to every guest in every community shop. We told employees that as we chart our path forward, we know that the structure we have today is not the structure we will need to accomplish this ambitious mission. To create the most awesome doughnut experience imaginable, we must succeed in new arenas such as digital evolution as well as focus significant efforts behind consumer convenience and new product innovation. In order to best position our talent and infrastructure to enable that growth, we are making necessary, but difficult, changes to our business.

We deeply value our heritage and attachment to Winston-Salem and will continue to invest in the area. We will maintain our global headquarters in Winston-Salem while creating new work spaces that reflect our ambition, which will include new offices in Charlotte and London in 2018. We will also continue to operate our mix plant and our equipment manufacturing business in Winston-Salem. While a majority of employees will remain in the area, some Winston-Salem-based employees will relocate to new locations.

Krispy Kreme Doughnuts Inc. is eliminating at least 90 local jobs as part of its plan to move some operational functions from Winston-Salem to Charlotte and London.

The company filed Wednesday a WARN Act notice with the Winston-Salem mayor’s office and the N.C. Commerce Department. The company said it will take until July to complete the elimination of what it called administrative support jobs, a term it did not further define.

Krispy Kreme has 150 employees at its Knollwood Street headquarters and 554 employees overall in Forsyth County, according to its last count to the Winston-Salem Chamber of Commerce.

That means the company is eliminating about 16 percent of its local workforce.

Krispy Kreme said in the WARN notice that all affected employees have been notified, and they will remain on the payroll with benefits for at least 60 days. They also will receive their share of the company’s 2017 bonus payments.

In both the notice and a statement to the media, Krispy Kreme said it will keep its global headquarters in Winston-Salem. The company is also maintaining its Ivy Avenue production plant and its equipment production facility off U.S. 311.

“While a majority of employees will remain in the area, some Winston-Salem-based employees will relocate to new locations,” according to the statement.

The company confirmed in October that it would create an operational presence in Charlotte.

The company did not have a response Wednesday when asked about which jobs – and how many – are going to Charlotte.

Sources have told the Winston-Salem Journal that senior management, marketing, training, construction and design headquarters employees would be among those moving to Charlotte or being hired there, while finance and information technology headquarters jobs would be moving to a smaller space in Winston-Salem.

Employees have told the Journal that Krispy Kreme’s international business is expected to move to the company’s operations in London. The statement appears to confirm a transition of some international operations by referring to a new office in London in 2018.

“We have spoken with our employees for several months about the journey that Krispy Kreme Doughnuts is on to transform into a global company,” the company said in its statement.

“We told employees that as we chart our path forward, we know that the structure we have today is not the structure we will need to accomplish this ambitious mission.”

That includes enhancing its digital and international infrastructure and revenue opportunities, the company said.

“To create the most awesome doughnut experience imaginable, we must succeed in new arenas, such as digital evolution, as well as focus significant efforts behind consumer convenience and new product innovation.

“In order to best position our talent and infrastructure to enable that growth, we are making necessary, but difficult, changes to our business.”

The company said it continues to “deeply value our heritage and attachment to Winston-Salem, and will continue to invest in the area.”

Krispy Kreme has been privately held since July 2016 when it was bought for $1.35 billion by JAB Beech, a subsidiary of German private-investment group JAB Holdings Inc.

When JAB Beech bought Krispy Kreme, it pledged to retain local management, the local headquarters and the local workforce.

The company has been based in Winston-Salem since being established by Vernon Rudolph in Old Salem in July 1937.

The sources say a potential move to Charlotte would be part of an overall JAB effort to raise Krispy Kreme’s profile as a premium brand.

“I certainly feel empathy for each of the individuals who are being displaced and wish them well in finding other positions,” Mayor Allen Joines said.

“I am pleased, of course, that the corporate headquarters will remain in Winston-Salem, as will the manufacturing operations.”

Joines said in October that chief executive Mike Tattersfield indicated the company would require less space in Winston-Salem as part of establishing a presence in Charlotte. He said Tattersfield mentioned the possibility of creating a company museum at whatever new site it takes in Winston-Salem.

“We told him we would be happy to work with them on whatever issues they have, and he said he would give us that chance, particularly with the new space needs,” Joines said.

Joines said he has heard, and sources have told the Journal, that Krispy Kreme is saying it is struggling to find skilled workers in Winston-Salem, and that some officials new to the company say Winston-Salem is proving to be a challenge to recruiting potential employees accustomed to living in a bigger city.

“It could come down to a preference of senior leadership” on what presence Krispy Kreme keeps in Winston-Salem, Joines said.

Gayle Anderson, president and chief executive of the Winston-Salem Chamber of Commerce, said that “while we regret the loss of any jobs, we are pleased the headquarters will remain in Winston-Salem.”

“We are confident that local employers will be interested in hiring many of the experienced professionals who will be leaving Krispy Kreme and wish to remain here.”

By Richard Craver Winston-Salem Journal

 

© © Copyright 2017, Winston-Salem Journal, Winston-Salem, NC

To Top