In a move to eliminate redundancies and improve efficiencies companywide, Ann Arbor, Mich.-based Domino's Pizza unveiled a large-scale U.S. marketplace reorganization plan on June 5.
Domino's vice president of corporate communications Tim McIntyre said the changes represent an aggressive effort to unify Domino's corporate and franchise components.
"This is all about one brand operating as one company," said McIntyre. "We want to be one team instead of two competing against each other. This is the first of many steps to get rid of any 'us versus them' idea."
A Domino's corporate memo detailing the changes was faxed and e-mailed to operators on June 5. A copy of the memo, which was supplied to PizzaMarketplace, discussed the elimination of 38 field-level positions as a result of the restructuring. McIntyre said those employees whose positions were eliminated mostly were lower-level managers and directors in charge of two to three employees.
They were told of their dismissals during the first week of June, were given severance packages and will receive outplacement services for two weeks.
"We brought them in, told them about the changes and have provided them a very fair severance package based on their seniority," said McIntyre.
Six of the employees were offered positions at J. Walter Thompson, the pizza chain's advertising agency of record. Should they accept those positions, they would work on marketing initiatives for Domino's.
Changes made near the top of the corporate structure include the appointment of Pat Knotts to executive vice president of flawless execution. According to the Domino's memo, Knotts has been instrumental in leading a performance turnaround at Domino's corporate stores since coming aboard in 2001.
Jim Stansik, a 17-year Domino's veteran, was appointed executive vice president of franchisee relations and will represent the office of the chairman.
Both Stansik and Knotts will serve on a leadership team headed by Domino's chairman Dave Brandon.
"That Jim Stansik was named v.p. of franchise relations speaks to the level of credibility he has with everyone in the company," said McIntyre. "And for Dave Brandon to take (Stansik's) leadership position and dedicate it solely to franchisee relationships speaks to the long-term goals of making our company better."
"There have been lots of rumors floating around that it was coming ... but I just don't think the people who got let go ever thought it would be them.""
The company's eight market management teams (three corporate and five franchise) were consolidated into three "franchise zones" located in Los Angeles, Baltimore and Atlanta. McIntyre said that in several cases, field personnel working on those teams performed similar duties that will be better managed by one team.
"This way we'll not have two teams -- sharing the same offices in some occasions -- working on the same projects," McIntyre said. "It's very efficient this way."
In January Brandon announced that the company was launching an examination of the company's field structure in order to pinpoint opportunities for improvement. Once those areas were determined, employees were chosen for promotion or to have their responsibilities broadened. After they were notified of the changes, they were asked for their opinions on where the company might trim positions.
Dave Wood, a 15-store franchisee with stores in northern Virginia, said he was disappointed several employees he knew lost their jobs, but he said he trusts Domino's leadership is making the right decision.
"It's always tough when you see people you've worked with let go," Wood said. "You've just got to hope that management knows what they're doing, and I think they do."
Wood said talk of job cuts had circulated for weeks, but no one really knew whose number would come up.
"There have been lots of rumors floating around that it was coming, so there wasn't really any shock about it," Wood said. "But I just don't think the people who got let go ever thought it would be them."
Several other franchisees contacted by PizzaMarketplace said they weren't aware of the restructuring and declined comment. One area supervisor who asked not to be identified said he knew nothing of the changes, but added, "pretty much all I know about corporate I read in the Pepperoni Press," Domino's company newsletter.
Toning up, not trimming fat
McIntyre asserted that the job cuts are in no way a sign of trouble at the company. When a company is very healthy and producing the returns Domino's has in the past two years, he said, the time to get lean and mean is now.
"This is not at all about downsizing or panic or weak sales," he said. "This is about making us stronger and more competitive."
Wood echoed McIntyre's confidence that Domino's is on the right track. Since Brandon was made president in 1999, Wood said he's been hard pressed to doubt the company's leader.
"We're on a nice run right now, I don't see that changing anytime soon, and that's why I'm not second guessing them," he said. "You've got to respect (Brandon's) ability to make the right decisions. He's certainly made some good ones so far."
Other noteworthy changes and appointments:
* Three vice presidents overseeing each franchise zone are: Danny Malamis (Atlanta); Scott Hinshaw (Baltimore); and David Pear (Los Angeles).
* Jim Lyons, a veteran of Denny's and Burger King. has joined the company as vice president of development. He oversee growth strategy, real estate, store construction and design and franchisee development/selection.
* Terri Snyder, Domino's current vice president of brand growth and market development, now will lead both the brand and corporate/franchise market development teams.