The head of McDonald’s has cautioned employees to anticipate job cuts as part of a major reorganization that will also accelerate the company’s plans to open new restaurants.
Chris Kempczinski, the CEO of McDonald’s, stated that the fast food giant is suffering from an “outdated and self-limiting” structure. “We are trying to solve the same problems multiple times, aren’t always sharing ideas,” he noted.
In a letter sent to employees worldwide, McDonald’s announced that it will review its corporate staffing levels by April. “There will be difficult discussions and decisions ahead,” the memo stated.
McDonald’s employs approximately 200,000 people across corporate roles and its owned restaurants, with 75% of these positions located outside of the US. The CEO also revealed that some projects will be halted entirely.
“This will help us move faster as an organization, while reducing our global costs and freeing up resources to invest in our growth,” he wrote in the letter to staff, which was also shared with investors.
The company did not specify the extent of the job cuts under consideration or indicate which projects might be affected.
In an interview with the Wall Street Journal, Mr. Kempczinski mentioned that he did not have a specific target for the number of cuts. “Some jobs that are existing today are either going to get moved or those jobs may go away,” he said.
As part of the new strategy, Mr. Kempczinski said the company aims to open more restaurants “to fully capture the increased demand we’ve driven over the past few years.”
While the dining industry generally struggled during the pandemic, McDonald’s benefited from investments in online ordering and home delivery services.
In the first nine months of the year, McDonald’s reported a 6% increase in sales, supported by price hikes on items like cheeseburgers.
However, its international profits have been impacted by the strengthening of the dollar and the company’s exit from Ukraine.
During its latest update to investors in October, McDonald’s highlighted that rising prices were presenting challenges, noting an “increasing uncertainty and unease about the economic environment” at many of its restaurants operated by franchisees.
Based in Chicago, McDonald’s operates in over 160 countries around the globe.
Earlier this week, the company announced its decision to withdraw from Kazakhstan, which borders Russia, citing supply chain issues caused by the war in Ukraine.
McDonald’s had already pledged to exit Russia in May after 32 years of operation there—marking another significant change amid ongoing upheavals in the restaurant industry.
