With Layoffs Across The Chain, Mcdonald's Reduces Pay Packages And Closes Offices

There have been hundreds of layoffs at McDonald's MCD 0.31% Corporation this week. In addition, some employees will see their paychecks reduced due to McDonald's restructuring, according to sources familiar with the matter.

‍

It has been reported that McDonald's Chicago headquarters and its field offices have been affected by job cuts and changes across multiple departments, including marketing and operations, which have affected people across the country, according to people who work at McDonald's Chicago headquarters and office locations.

‍

According to some people who spoke with the people involved in the restructuring process and internal company communications, the process unfolded over a period of several weeks this week. In a report published by The Wall Street Journal earlier this week, McDonald’s has temporarily closed its U.S. offices and informed some employees that they will be layoff on Monday. 

‍

According to people familiar with the matter, the fast-food chain also offered some employees the opportunity to remain with the company with a reduced compensation package, including changes to titles and benefits such as bonuses and equity grants, by reducing their compensation packages. 

‍

There were a number of other job changes and promotions this week as part of the restructuring plans. A internal email sent by the company to its employees on Thursday reported roles changing or promotions being made for nearly ten U.S. officers across operations, finance and marketing.

‍

There are concerns about a potential recession in the U.S. economy that companies around the country are cutting jobs, most of them white collar ones. Earlier this year, layoffs started in the tech sector, but have been spreading to other industries, with companies like Goldman Sachs Group Inc. and Amazon.com Inc. cutting employees recently.

‍

A McDonald's email sent to restaurant owners and operators on Thursday announced the closure of its field offices, saying most of their staff members spend their time working in restaurants, so the field offices are underutilized. Instead of creating a separate national structure to oversee its 10 field offices, the company said. 

‍

Despite the fact that McDonald's is in the strongest position it has been in years, Joe Erlinger, president and CEO of McDonald's USA, wrote in an email obtained by the Journal that, "we recognize that our business has grown increasingly complex in recent years."

‍

McDonald's sent an internal email last week to U.S. and international employees saying they would work from home from Monday through Wednesday so the company could make staffing decisions virtually in order to improve efficiency. In order to avoid any in-person meetings between McDonald's employees and outside parties at its headquarters, the company has asked all employees to cancel them.

‍

According to a person familiar with the matter, several of McDonald's United States employees who have been laid off have left the company, but will remain on the company's payroll until June 15, and after that can be severanced, which is paid to them. Employees who have been laid off have the option of returning or buying their company cars, the person said, in June.

‍

In addition to the senior employees who had served at McDonald's for decades, many of the employees who were laid off were individuals who had only recently started working there. In addition to writing emotional goodbye messages to colleagues and restaurant operators, a director of McDonald's who served in the company for over 20 years posted on LinkedIn a haiku in order to bid farewell to colleagues and restaurant operators. 

‍

There were words in the poem that read, "This is not a good-bye - but a goodbye note - I'm cheering for you," which was the closing paragraph of the poem.

‍

The McKinsey & Co. consulting firm advised McDonald's in restructuring the chain's operations, according to people familiar with the matter, according to sources with insight into the situation. 

‍

Recently, McDonald's has gone through several rounds of layoffs. As part of a half-billion dollar plan to shrink administrative expenses by the end of 2019, McDonald’s announced in 2018 that it was cutting its management to be “more dynamic, nimble and competitive.” As part of the plan, McDonald’s said at the time that it would lay off 50 percent of its staff to make it more dynamic, nimble, and competitive.

‍

During a January interview with The News Republic, Chris Kempczinski, the company's chief executive, revealed that he is expecting this year's workforce assessment will result in cost savings, but he did not give any specific numbers or numbers of jobs that he is looking to cut, or even the dollar amount of money that will be saved.

‍

McDonald's told its employees it was as a result of too many silos that caused it to make redundancies and slowed down the development of its innovative products. The company said it aimed to refocus its energy on some projects and stop or delay others.

‍

The number of people employed by McDonald's in the corporate world as well as in the company-owned restaurants was more than 150,000 before the layoffs, with most of those employees located outside of the U.S. According to the chain in February, 70% of its employees were located abroad.