McDonald’s Prepares To Lay Off Employees, Temporarily Shuts US Offices: Report

This week, McDonald’s Inc. will temporarily close its U.S. headquarters at the time when it prepares to inform corporate workers of job losses planned by the hamburger juggernaut as an element of a larger business restructuring. The Chicago-based fast-food giant instructed some domestic workers and some foreign workers last week to work from home on Monday through Wednesday to conduct staffing choices remotely. The notice from the company asked that all in-person meetings with suppliers and other third parties be cancelled at its offices.

The corporation stated in the memo seen by The Wall Street Journal that “during the week of April 3, we will discuss significant decisions about positions and employment levels across the enterprise.” On Sunday, McDonald’s opted not to comment on the amount of layoffs. In January, McDonald’s said that it will introduce “tough” “As part of a larger strategic strategy for the burger giant, decisions regarding adjustments to its corporate staffing numbers must be made by April.

Chris Kempczinski, the chief executive at the time, stated in an interview that he anticipated making savings as a result of the workforce review, but he added that he didn’t have a specific cash figure or several positions he was trying to eliminate. “Some jobs that are now in place will either be relocated or eliminated, “added Mr. Kempczinski. According to a February statement from the restaurant business, McDonald’s employees and over 150,000 people worldwide in executive roles along with its locations, 70% of which are outside of the United States. The decision to convey the news remotely, according to McDonald’s, was motivated by the reality that the week beginning April 3 would be busy for personal travel. 

In response to worries about a deteriorating economy, businesses across all industries are cutting back on staff. Retailers and other industries have seen layoffs that started in the tech world last year. After previously reported layoffs, Amazon.com Inc. said this month that it was shedding 9,000 more workers.

Even though merchants reported a drop in consumer spending, McDonald’s sales remained steady. Investors were told in January that certain lower-income customers were making less purchases or selecting less expensive options. Overall, they were still making purchases at the company’s restaurants. 2018 saw McDonald’s announcing management cuts to become “more dynamic, adaptable, and competitive.” The business announced at the time that the layoffs will take place as part of a $500 million initiative to reduce administrative costs by the end of 2019.

The headcount reduction’s extent was not disclosed by Mr. Kempczinski, the company’s then-U.S. president, although he did say that it encompassed regional chain offices. In 2019, McDonald’s reported employing 205,000 workers worldwide in corporate positions and its restaurants, a decrease from 235,000 in 2017.

McDonald’s said in a business statement dated January that the large organization worked in several silos, which hindered its innovation and led to layoffs. The chain announced that it intended to combine its efforts on some initiatives and stop working on others.

In Q4 2022, McDonald’s reports a decline in consolidated revenue

McDonald’s reported consolidated revenue of $5.9 billion for the fourth quarter (Q4) that ended on December 31, 2022, a 1% reduction from annual revenues of $6 billion for the same period the previous year. Nonetheless, compared to $23.2 billion the year before, the sales amounted for the entire period and were flat at $23.1 billion.
In Q4 2022, McDonald’s net income increased to $1.9 billion from the $1.6 billion the business recorded in the same quarter of 2021.

Its net profits for the year dropped from $7.5 billion the year before to $6.1 billion.
Comparing the most recent quarter to Q4 2021, the combined operating income improved by 8%, from $2.3 billion to $2.5 billion. Operating income dropped from $10.3 billion in 2021 to $9.3 billion in 2022, a 10% decrease. Sales across the entire system climbed by 5% both in the previous year and in the fourth quarter of 2022.
The restaurant company’s combined earnings per share increased by 19% to $2.59 in the fourth quarter of 2022, while the annual diluted profit per share fell by 17% to $8.33.

According to Chris Kempczinski, president and CEO of McDonald’s, “Our Accelerate the Arches strategy is creating growth and developing brand strength, providing strong full-year performance in 2022 with over 10% comparable gain in sales and 5% comparative visitor count growth globally.” Even though we anticipate short-term inflationary headwinds to persist in 2023, we are still quite optimistic about Accelerated the Arches, which now places more of a focus on brand-new restaurant openings.

The recently launched Accelerate the Organization project will complement this strategy by enabling the McDonald’s System to be speedier, more creative, and more efficient. Despite our continued success, we are not satisfied with our performance. That embodies McDonald’s.

McDonald’s employees claim the fast food giant has significant safety violations and treats them inhumanely.

Workers at McDonald’s have accused the company of major safety violations and “belittling and humiliating” staff. Respondents to a study conducted by a campaign organization claimed that the fast food chain’s unreliable schedules and low compensation forced staff to borrow money. One worker said that they were not taught how to perform their jobs safely by McDonald’s. As a result, the person asserted that they had a major injury that might have caused them to treat food in an unclean manner.

“I received a plaster but no safety gloves and the management didn’t seem to mind”, the employee who preferred to stay unnamed told Organize. The desire to work without “worrying about living month to month” was stated by another employee who professed to be on a zero-hours contract. It’s unlikely that McDonald’s is low on cash and has to make the cuts, one guy claimed.

To put a little extra dollars in their own pockets, they are willing to watch employees struggle. A third McDonald’s worker reported that supervisors “constantly belittle and abuse personnel disrespectfully” and “push kids to perform 16-hour shifts.”
This month, McDonald’s employees in the UK staged the company’s first-ever strike. The workers from the McDonald’s restaurants in Crayford and Cambridge, known as the “McStrikers,” received applause when shadow chancellor John McDonnell highlighted them this week at the Labour Party convention.

Shen Batmaz, one of the strikers, said on Monday that McDonald’s had dubbed them liars and claimed there were just a few of them. All of these people cannot be mistaken. We are aware that a McDonald’s employee can be identified by the burns on their arms. All of us have experienced violence and accidents at work. 400 petition signers who demanded that McDonald’s pay its employees £10 per hour were surveyed by Organise. It was discovered that 71% of those surveyed admitted to borrowing money to get by. In addition to family members, 23% of respondents claimed they had taken out high-interest payday loans.

Eighty-four percent of respondents indicated they would prefer to work a defined amount of hours each week, while 45 percent claimed they are already on unstable zero-hours contracts where assignments are frequently changed or canceled at the last minute. By the end of 2017, all of McDonald’s UK restaurants would offer the contracts, according to the fast food giant.

A request for comment on the allegations was not immediately answered by McDonald’s. The company stated in April that employees would have the option of fixed or flexible contracts with minimum guaranteed hours, and 86% of employees have opted to continue on flexible contracts. Facebook, Instagram, and WhatsApp‘s owner, Meta (META), said in March that it would implement a second round of employment layoffs. At about the same time, Amazon (AMZN) declared that it will add additional cuts to the ones declared in January. Others are also making layoffs, including Tyson (TSN) and Disney (DIS).

Yet, McDonald’s has been doing well while a lot of these businesses have been having trouble.

The business, which has been carrying out a growth strategy since the beginning of the epidemic, recorded a 10.9% increase in global sales in 2022 at stores open for at least 13 months. In 2023, the firm intends to launch 1,900 new eateries around the globe. Chris Kempczinski, the CEO of McDonald’s, warned the workforce in a memo in January that layoffs will soon occur.

There will be painful conversations and decisions, Kempczinski wrote at the time, and “some activities will be de-prioritized or discontinued completely. We will evaluate responsibilities and employment levels in portions of the business. As a result, we will be able to operate more swiftly as a company, cut down on costs generally, and free up cash for investments that will support future growth.

Edited by Prakriti Arora