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Tim Hortons to face more cuts as Restaurant Brands seeks additional savings

Corporate parent Restaurant Brands International Inc. in January cut 350 jobs from Tim Hortons' headquarters in Oakville, Ont., and later offered voluntary buyouts to 15 per cent of the head office staff, which three per cent took. Analysts say more cuts are on the way.

Tim Hortons has already had its expenses dramatically slashed since its merger with Burger King, but analysts believe more cost cutting is coming up next for the Canadian coffee and baked goods chain.

Corporate parent Restaurant Brands International Inc. in January cut 350 jobs from Tim Hortons’ headquarters in Oakville, Ont., and later offered voluntary buyouts to fifteen per cent of the head office staff, which three per cent took.

\”Very few individuals took it, but for those who weren\’t engaged, we gave them an ample opportunity to move on,\” Restaurant Brands leader Daniel Schwartz said now after the company revealed higher-than-expected second-quarter sales and profit. \”It\’s not about a number or perhaps a cost, it\’s about making sure that we have people who really want to be with us and striving for the Tim Hortons brand.\”

Restaurant Brands reported adjusted profit of 30 cents per share, outpacing analyst estimates of 25 cents.

Tim Hortons’ sales, general and administrative expenses were reduced to US$23 million within the quarter from US$42 million a year ago.

\”Restaurant Brands is probably not done with the cost-cutting at Tim Hortons,\” CIBC analyst Perry Caicco said in a note to clients. \”The newest step is probably the distribution system, which we expect to see Restaurant Brands make some move to restructure either later this season or in 2016 in the latest.”

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