McDonald's Plans Layoffs, Temporarily Shuts US Offices for Staffing Decisions

According to the Wall street journal, McDonald's Corp. has temporarily closed its US offices this week as it prepares to notify corporate employees about impending layoffs. The move is part of a broader company restructuring effort aimed at streamlining operations and improving efficiency.

The Chicago-based fast-food giant instructed its US employees and select international staff in an internal email to work from home from Monday to Wednesday. During this time, the company will communicate critical decisions related to roles and staffing levels throughout the organisation. Additionally, employees have been asked to cancel all in-person meetings with vendors and other external parties at its headquarters.

While the exact number of layoffs remains undisclosed, McDonald's had previously stated in January that it would make "difficult" decisions concerning corporate staffing levels by April. The restructuring is part of a strategic plan to adapt to the evolving fast-food landscape.

CEO Chris Kempczinski has acknowledged the need for workforce assessment in order to save money but did not specify a target dollar amount or a specific number of jobs to be eliminated. McDonald's currently employs over 150,000 people globally in corporate roles and its owned restaurants, with 70% of its workforce located outside the US.

The company has also stated that the week of April 3 is a busy one for personal travel, which influenced its decision to deliver the layoff news remotely. To ensure comfort and confidentiality during the notification period, employees without computer access have been asked to provide personal contact information to their managers.

The decision to reduce head counts comes as various industries face concerns about a slowing economy. Layoffs initially began in the tech sector but have since spread to retailers and manufacturers. Amazon.com Inc., for example, announced 9,000 additional job cuts last month.

Despite economic concerns, McDonald's sales have remained stable, even as retailers reported a slowdown in spending. The company informed investors in January that while some lower-income customers were ordering fewer items or choosing cheaper options, overall spending at its restaurants continued.

This is not the first time McDonald's has executed layoffs. In 2018, the company announced management cuts to become "more dynamic, nimble, and competitive" as part of a $500 million plan to reduce administrative expenses by the end of 2019. McDonald's employed 205,000 people globally in corporate roles and its owned restaurants in 2019, down from 235,000 in 2017.

The company acknowledged in a January message that operating in numerous silos had led to redundancies and slowed innovation. As part of its restructuring efforts, McDonald's plans to consolidate work on specific projects and either halt or move away from others.