McDonald’s is cutting salary packages and closing offices along with layoffs across the chain

McDonald‘s

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Corp. restructuring arrived. This week, it affected all parts of the company, resulting in hundreds of layoffs and package cuts for some employees, according to people familiar with the matter.

The people said the job cuts and changes at the burger chain affected employees in the US and abroad, at McDonald’s Chicago headquarters and in its field offices, and across departments including marketing and operations.

Some people said the company’s restructuring unfolded in a multi-part process this week, showing the company’s internal communications. The Wall Street Journal reported that McDonald’s temporarily closed its US offices and began notifying some corporate employees about layoffs on Monday.

The fast food chain also offered some employees a chance to stay with the company with cuts to their compensation packages, including changes to titles and benefits such as bonuses and stock awards, according to people familiar with the matter.

Restructuring moves this week included role changes or promotions for other employees, including approximately 10 US employees working across operations, finance and marketing, according to an internal email the company sent Thursday.

Companies across the US economy are shedding jobs, often white-collar positions, amid fears of a potential recession. The layoffs that began in the technology sector last year have spread to other industries, with companies from the Goldman Sachs group a company.

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McDonald’s told US restaurant owners and operators in the email Thursday that it will close its field offices in the coming months, saying it is underutilized with most field employees spending their time in restaurants. Instead, the company said it would adopt a single national structure that would oversee its 10 field offices.

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“While the McDonald’s brand is in the strongest position it has been in years, we also recognize that our business has grown more complex in recent years,” said Joe Erlinger, president of McDonald’s USA, in the email seen by the magazine.

In an internal email last week, McDonald’s told US employees and some international employees that they must work from home Monday through Wednesday so that the company can make hiring decisions virtually. McDonald’s has asked employees to cancel all in-person meetings with vendors and other third parties at its headquarters.

The laid-off American employees have left the company but will remain on McDonald’s payroll until June 15, after which they can get severance, according to a person familiar with the matter. The person said employees affected by the company’s vehicles have the option of returning the vehicles in June or purchasing the vehicles.

Among those laid off were senior employees who had worked at McDonald’s for decades as well as those who had held positions with the company for only a few years. Some have written emotional farewell messages to colleagues and restaurant operators, including a manager who has worked at McDonald’s for more than 20 years and said goodbye via a haiku posted on LinkedIn.

“This is not a farewell—but a ‘see you later’ note—I cheer you on,” read the poem’s closing words.

Consulting firm McKinsey & Co acted as an advisor to McDonald’s on efforts to restructure the chain, according to people familiar with the matter.

McDonald’s has made several rounds of layoffs in recent years. In 2018, the chain said it was cutting its management to be “more dynamic, smarter and more competitive”. McDonald’s said at the time that the layoffs would occur as part of a half-billion-dollar plan to cut back on administrative expenses by the end of 2019.

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CEO Chris Kempzynski said in a January interview that he expected to save money as part of this year’s workforce assessment, but said he didn’t have an exact dollar amount or number of jobs he was looking to cut.

In a company letter from January, McDonald’s said the company is operating in too many silos, which has led to layoffs and slowed its innovation. The series said it aims to consolidate its work on some projects and pause or distance itself from others.

Prior to the layoffs, McDonald’s employed more than 150,000 people globally in corporate positions and at company-owned restaurants, with 70% based outside the United States, the chain said in February.

Heather Haddon Companysibuted to Rhis article.

Write to Jesse Newman at [email protected] and Suzanne Vranica at [email protected]

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