A major shakeup is about to hit the American food business as Pizza Hut issues the pink slip that will render thousands of workers across more than 6,000 restaurants jobless.
Sources said that the transition will force Pizza Hut to shut down as many as 500 outlets in the United States as it looks for better options in the delivery and carry-out market, the company disclosed this week.
Around 500 dine-in branches across the US are expected to stop operations due to heavy competition in the food delivery market, Food Business News reported. The massive retrenchment is seen to commence in the next two years.
The shutdown comes following an earnings call with Yum! Brands chief operating officer, David Gibbs, who stated that the move "will ultimately boost the Pizza Hut brand in the United States and set it up for faster long-term growth." Yum! Brands operate Pizza Hut, Taco Bell, and KFC, among others.
Gibbs said that the number of Pizza Hut branches could decrease to as low as 7,000 shops in the next 24 months as the company focuses on weak-selling outlets for shutdown before the food company sees profits to normalize to "current levels and above in the future." Pizza Hut currently operates 6,100 restaurants and 1,350 express locations in the US.
According to Gibbs, it was not easy determining how soon the company will cease a branch's operations, and when the selected location re-opens for business. "There will be gaps on some of the locations," Gibbs said, pointing out that the pizza chain targets to "try to minimize those gaps."
The nationwide shutdown marks the end of a successful period for some customers who have memorable experiences with the pizza maker during their younger years. In a tweet by Tom Ryan, he said that "it is so sad as a kid and during teen years as this was the place to go and hang out."
"I had nothing but fond memories of the Pizza Hut buffet. It meant I was doing well in school and got to hang out with my sister and cousins," Jamie Lee said on Twitter. "In the '80s @pizzahut was a fun place to go. It had a comfortable pizza parlor feel as well as pinball and arcade machines. They were never the same after their more "industrial look" remodel," Thomas Rowe shared.
Meanwhile, KFC and Taco Bell will focus on delivery and KFC will team up with Grubhub and Taco Bell to offer delivery at 4,500 branches.
