McDonald’s plans reorganization, job cuts as it accelerates restaurant openings

McDonald’s plans reorganization, job cuts as it accelerates restaurant openings

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McDonald’s is planning job cuts and a reorganization as the company refocuses its priorities to accelerate restaurant expansion, CEO Chris Kempczinski told employees Friday.

The fast-food giant said the job cuts are not a cost-cutting measure, but rather aimed at helping the company innovate faster and work more efficiently. As part of the reorganization, the company will shed priorities and halt some initiatives, according to a company-wide memo from Kempczinski. It is unclear what those projects are.

“Today, we are divided into single-center silos, segments and markets,” Kempczinski wrote. “This approach is outdated and self-limiting – we’re trying to solve the same problems many times, we’re not always sharing ideas, and we can be slow to innovate.”

Currently, McDonald’s organization is divided into three segments: US, international markets operated and international markets licensed for development. The company operates in 169 markets worldwide.

Additionally, McDonald’s said Friday that it will accelerate its development plans for new restaurants.

“We must accelerate the pace of our restaurant openings to fully capture the growing demand we have driven over the past few years,” Kempczinski said in the memo.

McDonald’s had not previously released a forecast of how many new restaurants it plans to build in 2023, but the company said in November that the new units would contribute about 1.5% to systemwide sales growth in 2022.

The company has not yet decided how many new restaurants it will build and how many jobs will be eliminated as part of the reorganization. Kempczinski said the company will finalize and begin communicating layoff decisions by April 3.

Kempczinski also announced a series of internal promotions, effective February 1, to help the company implement its new strategy. Global Chief Marketing Officer Morgan Flatley will also oversee new business ventures. Skye Anderson will move from McDonald’s US Western region to global business services. Andrew Gregory’s role as global franchising officer will also include global leadership development, and Spero Droulias will move from CFO of McDonald’s USA to chief transformation officer of the company.

Shares of McDonald’s were up more than 2% in late trading on Friday. The company is expected to report its fourth-quarter earnings on January 31.

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