April 4, 2023
Whatever happened to the personal touch? Like a slew of other major firms, McDonald’s plans to sack its staff virtually. The burger chain is temporarily closing its U.S. offices this week as it prepares to inform corporate employees about layoffs undertaken as part of a broader company restructuring, reports The Wall Street Journal.
The Chicago-based fast-food chain said in an internal email last week to U.S. employees and some international staff that they should work from home from Monday through Wednesday so it can deliver staffing decisions virtually. The company, in the message, asked employees to cancel all in-person meetings with vendors and other outside parties at its headquarters.
“During the week of April 3, we will communicate key decisions related to roles and staffing levels across the organization,” the company said in the message viewed by The Wall Street Journal.
McDonald’s declined to comment Sunday on the number of employees being laid off. McDonald’s in January said that it planned to make “difficult” decisions about changes to its corporate staffing levels by April, as part of a broader strategic plan for the burger chain.
Chief Executive Chris Kempczinski said in an interview at the time that he expected to save money as part of the workforce assessment, but that he didn’t have a set dollar amount or number of jobs he was looking to cut. “Some jobs that are existing today are either going to get moved or those jobs may go away,” Kempczinski commented.
McDonald’s employs more than 150,000 people globally in corporate roles and its owned restaurants, with 70% of them located outside of the United States, the chain said in February.
McDonald’s in the message acknowledged that the week of April 3 would be a busy one for personal travel, which it said contributed to the decision to deliver the news remotely. Workers who wouldn’t have access to a computer during the week should provide personal contact information to their manager, the company said.
“We want to ensure the comfort and confidentiality of our people during the notification period,” the company said.
Companies across industries are reducing head counts amid concerns about a slowing economy. Layoffs that began in the tech sector last year have spread to retailers and manufacturers. Last month Amazon.com said it was eliminating 9,000 more jobs, following previously announced layoffs.
When Twitter in November notified staff about head count reductions, it said the company’s offices would be temporarily closed to ensure the safety of employees, Twitter’s systems, and customer data. Employees who were in the office or on their way to one were asked to go home.
McDonald’s sales have held up even as retailers have reported a slowdown in spending. The company told investors in January that some lower-income consumers were ordering fewer items per visit or opting for cheaper offerings, but customers generally continued to spend at its restaurants.
McDonald’s has conducted several rounds of layoffs in recent years. In 2018, McDonald’s said that the company was cutting its management to be “more dynamic, nimble and competitive.” The company said at the time the layoffs would occur as part of a half-billion-dollar plan to shrink administrative expenses by the end of 2019.
Kempczinski, who was the company’s U.S. president at the time, didn’t disclose the scope of the head-count reduction, but said it included regional chain offices. McDonald’s said it employed 205,000 people globally in corporate roles and its owned restaurants in 2019, down from 235,000 in 2017.
Research contact: @WSJ