Famous Dave's of America Inc. is cutting close to 15 percent of its relatively small corporate staff as the company seeks to rein in administrative expenses while sparking much-needed growth at its restaurants.
Earlier this week, Famous Dave's CEO John Gilbert sent a memo to employees outlining job eliminations and management reshufflings. Top jobs in finance, human resources — and one post in sales — will be erased, according to the memo obtained by the Star Tribune.
"We based our decisions solely on the need to align our expenses with the size of our business," Gilbert wrote in the memo, noting the cuts weren't based on performance.
Altogether, 12 upper-management posts will be eliminated, three of which are currently vacant, the Minnetonka company confirmed Friday.
Gilbert, a former e-commerce and retail executive, was named CEO of the barbecue chain in October, while at the same time Famous Dave's then-CEO Christopher O'Donnell became its chief operating officer. Gilbert said that when he arrived, the company was "a diamond in the rough," with strong potential for growth.
Yet that sales growth wasn't occurring. And the company had a "higher than acceptable growth in general and administrative expenses," Gilbert told the Star Tribune in an interview on Friday. The job cuts are "a calculated strategy to reduce the expense of the G&A line while growing the top line."
In the memo to employees, Gilbert also noted that Famous Dave's needs to "fix" the "economics" of its restaurants. During the interview with the Star Tribune, Gilbert gave examples of how the company is trying to do that, including taking its beef brisket production in house, cooking and smoking the meat itself. (Beef brisket is the only meat Dave's hadn't made from scratch.)
The result has been reduced costs and higher sales of beef brisket because the product is better, Gilbert said.
