TravelCenters of America (NASDAQ: TA) is cutting 130 corporate jobs as part of a sweeping reorganization announced Friday that adds new executives to oversee restaurants, gaming and convenience stores, corporate development and information technology.
The Westlake, Ohio-based operator of 260 TA, Petro Stopping Centers and TA Express-branded travel centers and truck stops in 44 states and Canada, has more than 21,000 employees.
The reorganization is unrelated to the April 17 furlough of 2,900 travel centers and 122 corporate employees due to the COVID-19 pandemic that forced the closing of dine-in restaurants. Passenger car traffic dropped dramatically as shelter-in-place orders took hold in 40 states.
The reorganization plan overseen by CEO Jon Pertchik comes less than six months after the veteran turnaround expert was hired to improve operational efficiency and boost profits. Pertchik told FreightWaves in an interview in March that private competitors like the Pilot Company and Love’s Travel Stops & Country Stores were “eating our lunch.”
TA recruited three senior vice presidents, one for a newly created hospitality department to oversee consolidation of restaurants, gaming and convenience stores; as well as new leaders for corporate development and information technology.
Corporate development will oversee the reorganization, including leveraging TA’s purchasing muscle in vendor negotiations to save money and streamline operations. TA also wants to grow revenue though better convenience store merchandising, over-the-road delivery, truck repair training and staffing and IT systems.
“By reorganizing and enhancing our leadership team, we have taken the first formal steps in executing TA’s turnaround by repositioning management, redefining management roles and operating focus, and strategically adding new management who bring new and valuable experiences, skills and outlooks to TA,” Perchik said in a release.
The cost of selling goods outpaced the revenue generated over the past decade, Pertchik said. The 130 job cuts are expected to save TA $13.1 million in sales, general and administrative (SG&A) expense while costing $4.2 million in severance and outplacement.
“We have worked hard on planning and developing the reorganization and transition plan announced today,” Pertchik said. “I believe that this plan will result in major changes in efficiencies and improvements to TA’s business and position it well for future success.”
The newly hired senior vice presidents are:
Kevin Kelly – Hospitality, from Delaware North, a global food service and hospitality company, where he was President of Travel Hospitality leading a subsidiary of more than 250 food service and retail locations in 19 airports.
Dennis King – Corporate Development, most recently an associate partner at McKinsey & Company, where he spent more than 15 years leading retail and consumer company transformations.
Sandy Rapp – Chief Information Officer, a 30-year IT veteran who most recently was chief information officer of the Timken Company.
Separately, on March 2, Pertchik hired Peter Crage, formerly chief financial officer of Diamond Resorts, a $1 billion private equity-owned organization with 350-plus vacation destinations in 35 countries, as CFO.
Around the same time, Pertchik asked TA President Barry Richards to give up the secondary role of chief operating officer “to focus on chasing down things that are underperforming.”
In the March interview with FreightWaves, Pertchik said a mix of internal and external hires makes the best leadership team.
“I just want to get things done and go kick some butt,” Pertchik said. “And have the team around me to do it.”