McDonald's Is Reportedly Slashing Jobs And Pay Packages In The US

Amid widespread layoffs affecting tech, finance, and business sectors, McDonald's employees are now facing cutbacks. The company is in the process of massive internal restructuring that has reportedly resulted in hundreds of corporate layoffs as well as reductions in compensation for employees that remain.

Earlier this year, McDonald's CEO Chris Kempczinski announced the initiative, "Accelerating the Organization," which is part of a larger development strategy that focuses on expanding the brand's reach while improving overall efficiency. While this approach has seen promotions across the leadership team, including the recent appointment of a new North America Chief Impact Officer and U.S. Strategic Insights and Prioritization Officer, it has ultimately required a cutting approach elsewhere throughout the company.

According to the Wall Street Journal, the fast food chain temporarily shuttered its offices across the U.S. this week, telling employees that they should work from home so that they could be informed of any staffing changes virtually. The company has slashed jobs at its Chicago headquarters and at field offices across the country. Additionally, unnamed sources said some employees were told that if they agreed to accept cuts to their pay packages and other benefits along with changes in their title or position, they could avoid being cut. Laid-off McDonald's employees won't be removed from the payroll until mid-June and will be able to receive a severance package, while those who were given company cars as a part of their job will have the option to personally purchase them.

Why are the cutbacks happening?

Despite recent price hikes and profits, the company's current restructuring aims to cut costs and reduce redundancies that higher-ups feel are slowing down innovation. Back in January, Kempczinski sent a memo to employees warning them of the present situation, according to ABC Chicago. He wrote, "Certain initiatives will be de-prioritized or stopped altogether. This will help us move faster as an organization while reducing our global costs and freeing up resources to invest in our growth."

President of McDonald's U.S. Joe Erlinger also revealed that the company would be permanently closing its 10 field offices across the U.S. in the upcoming months, a decision that is driving at least some of the many layoffs (per Restaurant Business Online). As expressed by the company, the physical outposts have been underutilized and costly, given the fact that many employees spend most of their time at restaurant locations rather than in the office. Instead, the remaining regional teams will transition to virtual employment, with one centralized national office to oversee all of the locations.

Although it's unclear whether there will be more internal layoffs anytime soon, the overarching initiative to expand the Golden Arches does appear to prioritize growth across marketing and franchising divisions in both the U.S. and abroad, which hopefully points to the creation of more jobs in the future.