October 1, 2023

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McDonald’s plans to reorganize and cut jobs as it speeds up restaurant openings

Noam Glay | Getty Images Entertainment | Getty Images

McDonald’s It plans to cut jobs and reorganize as the company refocuses its priorities to accelerate restaurant expansion, CEO Chris Kempzynski told employees Friday.

The fast food giant said the job cuts are not a cost-cutting measure but instead aim 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 Kempzinski. It is not clear what those projects are.

“Today,” Kempinski wrote, “we are divided into centric silos, sectors, and markets.” “This approach is outdated and self-limiting — we try to solve the same problems multiple times, we don’t always share ideas and we can be slow to innovate.”

Currently, the McDonald’s Corporation is divided into three divisions: United States, International Markets Operated and International Development Licensed Markets. The company operates in 169 markets around the world.

In addition, McDonald’s said on Friday that it will accelerate its plans to develop new restaurants.

“We must accelerate the pace of opening our restaurants to meet the increased demand that we have driven over the past few years,” Kempzynski said in the memo.

McDonald’s has 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 nor how many jobs it will cut as part of the reorganization. Kempzinski said the company will wind up and begin notifying layoffs by April 3.

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Kempzinski also announced a handful of internal promotions, effective February 1, to help the company implement its new strategy. Global Chief Marketing Officer Morgan Flatley will also oversee the new business ventures. Sky Anderson will move from McDonald’s West USA to Global Business Services. Andrew Gregory’s role as Global Franchise Officer will also include lead global development, and Spiro Droulias will transition from Chief Financial Officer of McDonald’s USA to Chief Transformation Officer for the company.

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