McDonald's closes U.S. offices as it prepares to inform workers of layoffs: WSJ
McDonald's has shuttered its U.S. offices this week as it plans to lay off an unspecified number of corporate employees, the Wall Street Journal reports.
The Chicago-based burger chain asked its corporate employees to cancel in-person meetings and work from home this week as they await notices about whether they will keep their jobs or be cut, according to an internal email cited by the Journal.
A McDonald's representative did not immediately respond to a CBS MoneyWatch query on how many roles the company will cut or why the company closed its offices.
The fast-food giant said it would hand down the layoff decisions remotely to ensure the "comfort and confidentiality" of its employees, as the beginning of April is a common time for personal travel, according to the email the Journal cited. The week of April 3 marks the beginning of Passover and the end of Lent.
McDonald's has more than 150,000 employees in corporate roles and in company-owned restaurants. About 70% of those employees are based outside the United States.
Many large companies have announced layoffs recently, mostly in the tech sector, with IBM, Microsoft, Amazon, Salesforce, Facebook parent Meta, Twitter and DoorDash announcing cuts in recent months.
There have been cuts in other sectors as well.
Food and hospitality employers, meanwhile, are still reporting difficulty hiring — including McDonald's, whose latest annual report said it was having trouble adequately staffing some of its outlets.
Policymakers at the Federal Reserve have forecast the unemployment rate may rise to 4.6% by the end of this year, a sizable increase historically associated with recessions.
"Difficult discussion and decisions ahead"
The burger chain's layoffs form part of a larger restructuring at the company, whose executives have expressed caution about the company's spending despite its growing profits in recent quarters. McDonald's reported fourth-quarter net income of $1.9 billion in 2022, up from $1.64 billion during the quarter a year prior, while its same-store sales rose 10.3% during the same period, the company's filings show.
"We're performing at a high level, but we can do even better," CEO Chris Kempczinski said in a January 6 letter to employees, according to the Associated Press. He said the company was divided into silos and that the approach was "outdated and self-limiting."
As the company reshapes its strategy, he said, "we will evaluate roles and staffing levels in parts of the organization and there will be difficult discussions and decisions ahead."
The Associated Press contributed reporting.