As it released yet another disappointing earnings report, Orlando-based Darden Restaurants said Friday it is eliminating 85 corporate positions and that its chief operating officer Drew Madsen is retiring.
It is the first time the company has had widespread layoffs at its Orlando headquarters, which employs about 1,300. Darden said some of the positions had already been vacant but would not say how many.
"It affected every department in the support center and at all levels, from very senior to lower level," said Bob McAdam, Darden's senior vice president of government and community affairs. He would not provide details.
"While we appreciate the dedication and selfless efforts of everyone who works at Darden, this difficult decision is necessary to position the company for success in these rapidly changing times," Chief Executive Officer Clarence Otis said in a memo.
Through layoffs and other spending cuts, Darden expects to save about $50 million a year.
Darden on Friday reported a 37.6 percent drop in profit for the first quarter compared with the previous year. Earnings per share were 53 cents. Analysts had expected 72 cents.
First quarter revenues were $2.16 billion, a 6.1 percent increase from the previous year.
But sales at established restaurants were down 3.3 percent at the biggest brands -- Olive Garden, Red Lobster and LongHorn Steakhouse. LongHorn performed well but sales at Olive Garden and Red Lobster were down.
Stock was down 5 percent Monday morning after the earnings report.
Darden outperformed its competitors during the early part of the economic downturn but has floundered in the recovery. The company has acknowledged it was slow to respond to shifting consumer tastes and Americans' constrained finances.
Analysts have been disappointed by the company's failure to woo back enough diners.
Madsen will leave Darden at the end of the second quarter.
He will step down from the board of directors and will be replaced by Gene Lee, currently president of Darden's Specialty Restaurant Group.
Kim Lopdrup, who has been leading the company's new business development initiatives, will take over leadership of the Specialty Restaurant Group, which includes smaller niche chains.
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Original headline: Darden Restaurants reducing 85 corporate positions; COO Drew Madsen leaving
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