McDonald's Is the Next Company Prepping for Mass Layoffs

Seth Perlman

The latest sign of potential economic turmoil can be seen in the fast food sector as McDonald’s seems to be preparing for a big layoff soon.

The Wall Street Journal is reporting today that the fast food corporation is temporarily closing its U.S. offices and is working to ready a series of layoffs ahead of long-expected economic turmoil (including a possible recession). According to the Journal, those workers to be laid off will be notified virtually.

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The Chicago-based fast-food chain said in an internal email last week to U.S. employees and some international staff that they should work from home from Monday through Wednesday so it can deliver staffing decisions virtually. The company, in the message, asked employees to cancel all in-person meetings with vendors and other outside parties at its headquarters.

“During the week of April 3, we will communicate key decisions related to roles and staffing levels across the organization,” the company said in the message viewed by The Wall Street Journal.

McDonald’s declined to comment Sunday on the number of employees being laid off.

The company has been signaling a mass layoff since January, when Chief Executive Chris Kempczinski admitted that he “expected to save money as part of the workforce assessment,” the Journal notes.

“Some jobs that are existing today are either going to get moved or those jobs may go away,” Mr. Kempczinski said at the time.

The fast-food chain employs more than 150,000 people globally, and that’s both in corporate roles and its owned restaurants; 70 percent of those jobs are located outside of the U.S., the chain said in February.

It’s part of a larger trend across the country of major companies preparing for and making big cuts to their workforce in anticipation of an economic slowdown or even a full-blown recession. Those concerns stem from high inflation that, while cooling in recent months, has the Federal Reserve hiking interest rates, which typically leads to a recession.

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However, the Fed has a delicate balancing act in trying to avoid a recession while also meeting its goal of getting inflation down to 2 percent. It’s still several percentage points away from that goal, and despite a temporary banking crisis in March, the board increased the interest rate another 25 basis points in its most recent meeting.

McDonald’s is an industry leader in the fast food world, with a history of fundamentally changing how those types of businesses can be run quickly and efficiently. Now, it says it has “operated in too many silos, leading to redundancies and slowing its innovation.” It plans to make cuts to streamline its business, which may include abandoning some of its projects in favor of efficiency and better use of resources.

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