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

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MC Donalds 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 aren’t a cost-cutting measure but are instead intended to help the company innovate faster and work more efficiently. As part of the reorganization, the company will be deprioritizing and holding certain initiatives, according to a company-wide memo from Kempczinski. It’s unclear what those projects are.

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 “This approach is outdated and self-limiting – we are trying to solve the same problems multiple times, aren’t always sharing ideas and can be slow to innovate.”

Currently, McDonald’s organization is divided into three segments: the US, internationally operated markets and internationally developmental licensed markets. The company operates in 119 markets across the world.

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

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

McDonald’s hadn’t previously released a forecast for how many 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 sales growth in 2022.

The company has not decided how many new restaurants it will build yet nor how many jobs will be eliminated as part of the reorganization. Kempczinski said that the company will finalize and begin to communicate decisions on the layoffs by April 3.

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

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

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