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McDonald’s is planning job cuts and reorganization as the company refocuses its priorities on accelerating restaurant expansion, CEO Chris Kempczinski told employees Friday.
The fast food giant says the job cuts are not a cost-cutting measure but are instead intended to help the company innovate faster and operate more efficiently. As part of the reorganization process, the company will reduce priorities and pause certain initiatives, according to a company-wide memo from Kempczinski. It’s not clear what those projects are.
Kempczinski writes: “Today, we are divided into silos with hubs, segments and markets. “This approach is outdated and self-limiting – we’re trying to solve the same problem over and over again, don’t always share ideas, and can be slow to innovate.”
Currently, the McDonald’s organization is divided into three segments: the US, the international operating market, and the internationally licensed market. The company operates in 119 markets worldwide.
In addition, McDonald’s said Friday that it will accelerate its plans to develop new restaurants.
“We must accelerate the pace of our restaurant openings to fully meet the increased demand that we have driven over the past few years,” Kempczinski said in the memo.
McDonald’s had not previously given a forecast for the number of new restaurants it plans to build by 2023, but the company said in November that the new units would contribute about 1.5% to sales growth. system by 2022.
The company has yet to decide how many new restaurants it will build or how many jobs will be eliminated during the reorganization. Kempczinski said that the company will finalize and start announcing decisions on layoffs by April 3.
Kempczinski also announced several internal promotions, effective February 1, to help the company execute its new strategy. Global Marketing Manager Morgan Flatley will also oversee new business ventures. Skye Anderson will move from McDonald’s in the US west to the global business services. Andrew Gregory’s role as global head of franchising will also include leading global development, and Spero Droulias will transition from senior vice president of finance to director of corporate transformation.
Shares of McDonald’s closed up more than 2% on Friday. The company is expected to report fourth-quarter earnings on January 31.
