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174 Laid Off at Hardee's by CKE

July 17, 1997|GREG JOHNSON | TIMES STAFF WRITER

ANAHEIM — CKE Restaurants Inc. has laid off 174 corporate and division employees at Hardee's Food Systems Inc. as part of an ongoing restructuring of the burger chain operator's latest acquisition.

The round of layoffs on Tuesday came just hours after CKE, parent of Carl's Jr. restaurants, completed its $327-million purchase of the Rocky Mount, N.C.-based Hardee's fast-food chain from Montreal-based Imasco Ltd. CKE had indicated in Securities and Exchange Commission filings that a significant number of Hardee's employees would be dismissed when the deal was finalized.

About 95 of the layoffs were at the 3,000-unit burger chain's corporate headquarters, CKE executives said Wednesday. The rest were scattered about the chain's division operations. Hardee's had about 400 corporate employees before the layoffs.

No employees were laid off at CKE's Anaheim headquarters or in its divisional operations.

The pink slips at Hardee's are part of a massive overhaul that CKE hopes to engineer at the burger chain, which has generated a string of losses in recent quarters for Imasco.

"We have a list of things we need to do," said former CKE executive Rory Murphy, who was selected earlier this month to serve as Hardee's president and chief operating officer. "One of the first things we will do is try to make sense of Hardee's menu."

Unlike most burger chains, Hardee's generates a hefty percentage of its revenue and profit from its breakfast menu. Sales from lunch and dinner, however, are noticeably lower than the industry average, and restaurant industry analysts say the chain seems to have lost its focus.

Murphy said that Hardee's plans to test market charbroiled sandwiches from the Carl's Jr. menu at restaurants in Oklahoma City and Charleston, S.C. The tests that will begin early in November could pave the way for the addition of Carl's Jr. fare elsewhere in the Hardee's system.

Restaurant industry analysts say that CKE will have to squeeze costs from Hardee's operations if the chain is to be turned around and made profitable. "We're hoping to get on top of the operation right away by putting our best practices to work in the system," Murphy said.

CKE stock rose $2.625 to $33.625 on Wednesday in New York Stock Exchange trading.

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