With Recession Looming, Major Fast Food Chain Warns That Layoffs Are Coming - Only a Matter of Time
With the expectation that a looming recession will take a bite out of its profits, McDonald’s plans to get rid of some corporate-level jobs.
Burger chain CEO Chris Kempczinski said he wants to cut costs but does not have a target for how much to save or how many jobs to cut.
“Some jobs that are existing today are either going to get moved or those jobs may go away,” Kempczinski said Friday, according to The Wall Street Journal.
The chain will inform those heading for the exit by April 3.
“There will be difficult discussions and decisions ahead,” McDonald’s said in a company-wide message.
“We will evaluate roles and staffing levels in parts of the organization, and there will be difficult discussions and decisions ahead,” Kempczinski wrote in a memo to staff obtained by the Epoch Times, which noted McDonald’s has about 200,000 staff at the corporate level.
“Certain initiatives will be deprioritized 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.”
Kempczinski framed the cuts as a reorganization in the name of efficiency.
“Today, we’re divided into silos with a center, segments, and markets. This approach is outdated and self-limiting -- we are trying to solve the same problems multiple times, aren’t always sharing ideas and can be slow to innovate,” he wrote.
However, he added that the chain will not be retrenching at the consumer level.
“We must accelerate the pace of our restaurant openings to fully capture the increased demand we’ve driven over the past few years,” Kempczinski wrote in the memo.
After Amazon, Microsoft, and Twitter, McDonald's adds its name to the #layoff bandwagon.
— WION (@WIONews) January 7, 2023
The Journal noted that many giants, from PepsiCo to Ford to Walmart are trimming jobs at the corporate level.
Kempczinski said in October that McDonald’s was anticipating that 2023 would bring a recession.
“Our base case scenario going forward is that we expect to experience a mild to moderate recession in the U.S. and one that will be potentially a little deeper and longer in Europe,” he said, according to RestaurantBusinessOnline.
Some fear the looming recession will be hardest on those with the least ability to roll with the punches.
“As we look ahead, I think it is entirely possible that the households and the people we usually worry about at the bottom of the income distribution are going to run into some kind of combination of job loss and softer wage gains, right as whatever savings they had from the pandemic gets depleted. And it’s going to be tough on them,” said Karen Dynan, a former chief economist at the Treasury Department and a professor at Harvard University, according to The New York Times.
This article appeared originally on The Western Journal.