McDonald’s temporarily closes US offices ahead of layoffs
McDonald’s has closed its US offices until Wednesday and told its employees to work remotely as it prepares to announce a round of layoffs.
In a memo to workers posted on the website TheLayoff.com, the Chicago-based burger giant said it wanted to “ensure the comfort and confidentiality of our people during the notice period” and would hold all notice meetings virtually. It asked international company employees to follow the guidance in their particular regions.
The company said in the memo that the layoffs are intended to make McDonald’s more efficient.
“We have a clear opportunity ahead of us to become faster and more efficient at solving problems for our customers and people and globally scale our successful market innovations at rapid speed,”[ads1]; the company said.
McDonald’s declined to comment on the memo or the layoffs today. The memo was first reported by the Wall Street Journal.
Although the US labor market remains strong, layoffs have increased, mainly in the technology sector, where many companies overstaffed after a pandemic boom. IBM, Microsoft, Amazon, Salesforce, Facebook parent Meta, Twitter and DoorDash have all announced layoffs in recent months.
There have also been cuts in other sectors.
Most of these cutbacks are in corporate offices. There is still a shortage of workers to fill service jobs, such as those at McDonald’s restaurants.
Federal Reserve policymakers have predicted that the unemployment rate could rise to 4.6% by the end of this year, a significant increase historically associated with recessions.
McDonald’s has more than 150,000 employees in corporate roles and in company-owned restaurants. Approximately 70% of these employees are based outside the United States.
McDonald’s shares rose 1 percent today. The company’s revenue was flat at $23.2 billion for the full year in 2022, but net income fell 18%, partly due to the sale of its Russia business.
McDonald’s warned employees in January that layoffs would come as it tried to become more nimble and break down walls between its global markets. In a January memo to employees, McDonald’s President and CEO Chris Kempczinski said the company was evaluating roles and staffing levels in various parts of the company.
“We’ve historically been very decentralized in some areas where we reinvent the wheel far too often,” Kempczinski said on a conference call with investors in January. “And I think the other thing I’ve seen is that we haven’t been as sharp about our global priorities, and so there’s been a dispersion of priorities.”
In one market, Kempczinski said he had recently discovered a list of 300 separate priorities.