In a move that has stunned its 500-member work force, Denny's Inc. has decided to close its corporate headquarters in Irvine and consolidate operations into its parent company in Spartanburg, S.C.
The relocation will mean the elimination of about 400 jobs in Southern California. Many Denny's workers will face a difficult dilemma: deciding whether to move nearly 3,000 miles to begin a new life or face finding a new job in a slumping economy.
Denny's, the nation's largest coffee shop chain, said it will retain about 100 employees in Southern California. An undisclosed number of workers will be laid off and the rest asked to relocate to Spartanburg, a city proud of its rural character and sausage biscuits.
The announcement surprised Denny's employees, particularly since it comes soon after the company moved its headquarters from La Mirada to the mirrored, sprawling Park Place office complex next to the San Diego Freeway.
"It's up in the air for me," said one worker, who would not give his name. For many of his co-workers, he said the prospect of moving to the South is "a painful thought. A lot of them aren't going to do it."
But he added, others are enticed by the prospect of lower housing costs. "You can buy a mansion for the price of a shack" in Orange County, he said.
TW Services Inc., the Spartanburg-based parent of Denny's, announced the move Thursday as part of an effort to centralize its five food-service operations. While no timetable was announced, the consolidation is expected to take two to three years.
The company also announced a shake-up of management. Sam Maw, the longtime TW executive who has served a president of the 1,300-restaurants Denny's chain for three years, will take a new position as senior vice president of product development for the firm.
He will be replaced by Bernard Scott, a vice president of operations for Denny's on the East Coast.
Roger Shively, vice president in charge of human resources, said about 20% of Denny's corporate employees will be retained in Irvine to manage the El Pollo Loco chain of Mexican-style charbroiled chicken restaurants and the West Coast operations of Denny's.
For those who are laid off, he said the company will be providing severance pay based on length of service, bonus pay to stay during the transition and help with placement in new jobs at other companies. He said that more clerical workers than middle- and low-level managers are being laid off.