On Friday, McDonald’s (MCD) CEO Chris Kempczinski told employees in a companywide memo that it would be cutting jobs and reorganizing the company as it is refocusing its priorities towards accelerating the expansion of its restaurants worldwide. McDonald’s shares were up by 2 percent, at market close, on Friday.
The memo by the CEO said that the company had an “outdated and self-limiting” structure that was hindering its growth. He mentioned that McDonald’s was “trying to solve the same problems, multiple times.” He also said that the international company was not “always sharing ideas.”
The company’s new strategy will include opening new restaurants as it wants “to fully capture the increased demand” that the company had driven, in the past years. Although the pandemic slowed or stopped restaurant sales, McDonald’s had invested in online ordering and home deliveries that helped the chain during the pandemic.
McDonald’s is also expected to finalize its layoffs and open communications about them by April 3. Some internal promotions, effective February 1, were also mentioned by the CEO. These new promotions have been made to implement the new strategies.
As of now, the company has not decided on the number of jobs that will be cut, as a result of its reorganization. McDonald’s has not mentioned the number of new restaurants that will be built. Last November, the company said that new units are expected to contribute to approximately 1.5 percent of system-wide sales growth.
McDonald’s operates its restaurants almost all over the world. There are approximately 200,000 people in corporate roles and in its owned restaurants. About 75 percent of these employees are located outside the U.S. The food giant that is headquartered in Chicago has its operations in more than 160 countries around the world.
Although McDonald’s saw a rise of 6 percent in sales, for the first three quarters of the year, due to an increase in price of its cheeseburger, a strong dollar and the war in Ukraine has hurt overseas profits. The food and beverage giant will reportedly release its fourth quarter earnings on January 31.
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