Sandwich chain Subway has laid off 300 employees at its Milford, Connecticut headquarters as part of a move to downsize and reduce costs as the company struggles with financial losses and a continual decline in sales.
Subway's mass layoffs at its headquarters have put 300 workers, roughly a quarter of its administrative staff, out of work. The move is the latest decision by the company in its ongoing attempt to stabilize operations as the once-iconic chain continues a staggering downfall. Previous efforts including a shakeup at the executive level, such as the hiring of former Burger King (NYSE: QSR) CEO John Chidsey as Chief Executive, as well as the dismissal of several tenured executives, and the hiring of several more.
The once prosperous company had seen explosive growth over several years, reaching a peak in 2015 before entering a period of protracted decline that has continued well into 2020. Aside from laying off staff, the company has also been forced to close over 2,000 stores. Subway, which had long touted itself as a healthy alternative to contemporary fast-service chains, is facing far stiffer competition than it had in past years. Many newer fast-casual chains have sprung up, with a great many offering healthy options alongside regular fare, or being entirely dedicated to healthy eating. Other major chains such as Burger King and McDonald's (NYSE: MCD) have begun offering healthy menu items and alternative options such as "impossible" meatless products. Subway is essentially becoming increasingly irrelevant in an industry where its competition is rapidly adapting to changing trends demanding healthier, cheaper fare.
The reaction has been mixed. Experts have not yet reached a consensus on the decision, as many have not yet commented on the decision, however, former employees have been vocal in their disdain for the decision, including several who were let go in the layoffs - many mentioned in their complaints that they had been with Subway for years before their abrupt firing. An aspect of the firings that has draw questions from members of the press is the supposed presence of police officers in the lobby of the building the day of the firing, supposedly summoned by Subway to provide security, though the company has yet to confirm or deny this, nor have Milton police. Questionable conduct by leadership at the company that was potentially contributing to the decline in sales was being questioned as far back as 2017, where Dr. Peter Buck, who invested in his friend, Subway founder Fred DeLuca's business and maintained a substantial stake in Sub, commented that he believed that Subway leadership was spending money frivolously. Buck was quick to question the company's decision to maintain its status quo rather than try to compete with smaller chains like Jersey Mike's, which are slowly growing their stake in the market.