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Krispy Kreme reticent about plans move Krispy Kreme, Charlotte officials remain silent on operational plans

Krispy Kreme Doughnuts Inc. made clear Wednesday that its future requires having a presence in Charlotte and shrinking its Winston-Salem workforce.

What the company has not made clear is what that Charlotte presence will look like, where its operations there will be based and which jobs are being moved.

The company is eliminating 90 jobs in Winston-Salem, it said Wednesday.

Krispy Kreme officials have not answered any of those questions, despite multiple requests from the Winston-Salem Journal.

The only employment-related comment in its statement Wednesday was “while a majority of employees will remain in the area, some Winston-Salem-based employees will relocate to new locations.”

As such, what Krispy Kreme and Chief Executive Mike Tattersfield are leaving unsaid is becoming the story about a restructuring focused on its digital platform and global growth.

According to a federal WARN Act notice sent to the Winston-Salem mayor’s office and N.C. Department of Commerce, Krispy Kreme’s “reorganization will allow the company to meet anticipated business needs and global transformation, including an office in Charlotte.”

The company also reaffirmed on Wednesday its pledge to keep a global headquarters presence in Winston-Salem and about 460 jobs overall in Forsyth County.

Sources have told the Journal that current headquarters employees in senior management, marketing, training, construction and design would be among those moving to Charlotte or being hired there, while headquarters jobs in finance and information technology would be moved to a smaller space in Winston-Salem. The company’s office is off Knollwood Street, near Thruway shopping center.

The statement appears to confirm a transition of some international operations from Winston-Salem by referring to a new office in London expected to open in 2018.

Charlotte economic officials are similarly mum about discussing Krispy Kreme’s plans for its move to the state’s largest city.

Dianne Chase, spokeswoman for the Charlotte Regional Partnership, said Thursday that the economic group “is not at liberty to discuss this project.”

Charlotte Chamber of Commerce spokesman Natalie Dick said Thursday that “we wish to refrain from commenting at this time.”

The $1.35 billion deal

When JAB Beech bought Krispy Kreme for $1.35 billion in July 2016, it pledged to retain local management, the local headquarters and the local workforce.

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.

Krispy Kreme said in the WARN notice that all affected employees have been notified and that 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.

The federal Worker Adjustment and Retraining Notification, or WARN, Act was put into place in 1989 with the intent of preventing situations in which rank-and-file employees show up for work only to discover their employer has shut down without notice.

The act does this by requiring companies that are planning large job cuts – defined as more than 50 employees – to notify their state and local governments, as well as affected workers, at least 60 days in advance.

Krispy Kreme said it will take until July to complete the elimination of what it called local administrative support jobs, a term it did not further define. Sources have told the Journal that some job cuts will come in March.

The company is maintaining its Ivy Avenue production plant and its equipment production facility off U.S. 311.

“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,” according to Krispy Kreme’s statement.

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

Employees likely

to find jobs

Roger Beahm, the executive director of the Center for Retail Innovation at Wake Forest University, said he expects many of the Krispy Kreme employees being let go will be successful in finding similar work locally.

“While there is never a good time for any individual to be laid off, the local business climate is certainly more favorable for those displaced now than it has been for some time,” Beahm said. “There are needs in the area right now for strong talent in fields like marketing, operations and finance.

“Having Krispy Kreme on your resume opens doors that lesser-known company names would not,” he said.

Beahm said he understand the potential attractiveness of the Charlotte and London markets to Krispy Kreme.

“Future jobs can and will be created around new areas of company growth,” he said. “A changing consumer marketplace, as well as changes in technology and business strategy, will likely create different employment opportunities when compared to the positions being eliminated today.”

“These new jobs most likely will require talent with different skill sets and experiences.”

Beahm said “it would seem Krispy Kreme is attempting to create a win-win for both Winston-Salem and Charlotte.”

“Clearly Charlotte is gaining something from this reorganization,” he said.

“But we should also recognize that while Winston-Salem may have lost a battle, it doesn’t appear to have lost the war.”

By Richard Craver Winston-Salem Journal

 

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

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