Wowprime Corp (王品), the nation’s largest restaurant chain operator, yesterday denied a media report that morale at the company has been rocked by massive layoffs and employee benefit cuts, as last year’s string of food safety scandals continue to drag on sales growth.
“While we acknowledge that the company’s slowing growth rate has compelled some of our staff to tender resignations, the change in overall headcount is not out of the ordinary amid a persistent labor shortage in the restaurant industry,” Wowprime chairman Park Chen (陳正輝) told reporters, adding that the company is still profitable and financially sound.
Chen, who was appointed chairman in July, said that the company raised its hiring target two months ago as it prepares to launch new brands.
The Chinese-language Apple Daily yesterday reported that Wowprime, beset by cash flow woes, is planning to lay off 20 to 30 percent of its head-office staff, leading to a flight of senior managers.
The report also said that since taking the reins, Chen had been quick to close down unprofitable stores and underperforming brands, such as the shuttering of Famonn Coffee (曼咖啡) in July because the chain had failed to meet sales expectations since it was established in 2011.
Wowprime’s financial report indicates that as of last month, the company’s total headcount had decreased by about 1,200, or 10 percent, to 17,351.
“The reduced headcount is partly due to the departure of 700 to 800 former Famonn Coffee employees following the chain’s shuttering. Although we did our best to reassign them to the group’s other brands, many of them said that they wished to continue pursuing a career in the coffee industry,” Chen said.
However, the company did not explain how Famonn Coffee, which had 11 stores in February and five in its final month of operation, required 700 to 800 employees, or about 50 per store, compared with the average headcount of 15 at competing coffee shops.
The report also said that the company has halted its employee share ownership program to cut monthly costs by about NT$20 million (US$607,183).
The company said that the scheme is undergoing an adjustment so that it yields improved returns.
Chen said that the company would continue to streamline its operations and transition its lower-priced brands from standalone stores to shopping mall food courts.
Instead of developing more home-grown brands, Chen said that the company is looking to bring international franchises to Taiwan.
To display its commitment to food safety, Wowprime yesterday unveiled its cloud-based database that allows consumers to check the ingredients used at the company’s restaurants.
Wowprime shares declined 0.83 percent to close at NT$182 in Taipei trading yesterday.
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