• by Nina Lentini  @Nina_Lentini, March 6, 2008

Although Domino's Pizza is eliminating 55 jobs and selling 60 of its restaurants to franchisees and employees, the company says it has no plans to change its marketing strategy.

Jenny Fouracre, a spokesperson for the Ann Arbor, Mich.-based chain, says the job cuts are being made "very evenly" and are split between headquarters and field. They range, she says, from human resources and distribution to marketing and auditing.

Two weeks ago, Domino's reported net income down nearly 48% in the fourth quarter and 64.3% for the full year versus the prior year periods, driven primarily by increased interest expense from higher borrowings under the company's new debt structure.

It also attributed the bad earnings report, to a lesser extent, to a decrease in domestic supply chain margins resulting from lower volumes and lower domestic company-owned store margins. This was offset in part by continued strong performance in international, the company said.

According to Nielsen Monitor-Plus, Domino's spent $142 million on advertising in the first 11 months of 2007, down from $169 million for all of 2006.

Fouracre said the southern California environment has been a particularly difficult one for Domino's, and that some employees there wanted to purchase restaurants. "We like to grow our corporate system from within," she said.

The company estimated the job cuts will result in an annual savings of about $4.5 million before taxes. The chain will incur costs of about $1.3 million in the first quarter, including $1.1 million for severance.

Across the board, Domino's roughly 570 company-owned pizza shops performed better than its stores owned by franchisees. Domino's has about 2,000 franchisees who own more than 8,000 stores.

As a result of Domino's not meeting its internal earnings target, none of its full-time employees were granted company performance-based bonuses for 2007, for the first time since the program started in 2001.