Fallout From Burger King/Tim Hortons Merger, Tim Hortons Cuts 350 Head Office Jobs

With the merger between Burger King and Tim Hortons complete, the fallout now begins.

Bloomberg Business is reporting that Tim Hortons is cutting about 15 percent, or 350 positions, from the home office and other non-store positions in an effort to streamline the business as it prepares to begin a global push. Alexandra Cygal, a spokesperson for the store, said it would affect about 2,300 positions at the headquarters, regional offices, and other non-store facilities. It is being reported that the cuts are now complete.

Burger King, back in August, proposed the merger with Tim Hortons in an effort to strengthen its brand and move the corporate offices to Ontario, Canada, where Burger King’s tax burden is markedly reduced. The merger, now complete, created a new corporate front, Restaurant Brands International. This will allow both Burger King and Tim Hortons to become the third-largest fast food corporation world wide, and to help grow its global presence.

The new conglomerate, owned by New York-based Brazilian investment firm 3G Capital, received more than $3 billion from Berkshire Hathaway, a financing company aligned with Warren Buffett.

Reuters is reporting that the decisions made were not easy, but necessary.

“We have had to make some difficult but necessary decisions today as we reorganize our company to position ourselves for the significant growth and opportunities ahead of us,” said Cygal.

The cuts, being considered a reorganization, began by moving personnel to other positions. Those who were asked to leave the company were given enhanced severance packages and continuing health benefits, Cygal said.

The Toronto Star is reporting that during the negotiations for the merger, Burger King had to guarantee that 100 percent of the store staffs throughout Canada would be maintained. Industry Canada minister James Moore, in a rather secret backroom deal, got Burger King to agree to keep at least 80 percent of “the entire corporate footprint,” who must remain employed. Burger King settled on the 15 percent cuts.

Restaurant Brands International has also said that these current cuts are necessary to open the door for expansion of both stores in North America and, eventually, the world.

Though all deals have been adhered to thus far, Industry Canada does have the right to sue Burger King and Restaurant Brands International if they go back on any part of the deal previously agreed to.

Media speculation had gotten a bit out of hand, reporting that many middle management employees had been let go, which is not the case.