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

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McDonald’s plans 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 are intended to help the company innovate faster and operate more efficiently. As part of the reorganization, the company will deprioritize and discontinue certain initiatives, according to a company-wide memo from Kempczinski. It is not clear what those projects are.

“Today we are divided into silos with a center, segments and markets,” Kempczinski wrote. “This approach is outdated and self-limiting — we try to solve the same problems multiple times, don’t always exchange ideas, and can be slow to innovate.”

Currently, McDonald’s organization is divided into three segments: the US, Internationally Operated Markets, and Internationally Licensed Developing Markets. The company operates in 119 markets around the world.

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

“We need to accelerate the pace of our restaurant openings to fully accommodate the increased demand we have fueled in recent years,” Kempczinski said in the memo.

McDonald’s had not previously released a forecast on the number of new restaurants it plans to build in 2023, but the company said in November that new units would contribute about 1.5% to system-wide revenue growth in 2022.

The company has not yet decided how many new restaurants it will build, nor how many jobs it will cut as part of the reorganization. Kempczinski said the company will finalize the layoffs by April 3 and will begin communicating decisions about the layoffs.

Kempczinski also announced a handful of internal promotions, effective Feb. 1, to help the company execute on its new strategy. Global Chief Marketing Officer Morgan Flatley will also oversee new business ventures. Skye Anderson moves from McDonald’s US west zone to global business services. Andrew Gregory’s role as global franchising officer also includes leading global development, and Spero Droulias will move from senior vice president of finance to chief transformation officer of the company.

Shares of McDonald’s closed more than 2% higher on Friday. The company is expected to report its fourth-quarter results on January 31.



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