Usually when a company announces a mass layoff, it's because things aren't looking the best financially. But with McDonald's, that doesn't appear to be the case.
McDonald's impending layoff of hundreds of employees comes on the heels of a profitable year for the fast-food giant, according to documents obtained by NPR.
The company's most recent annual report indicates global sales saw an 11% spike in 2022, with nearly 6% of those profits occurring in the United States. Moreover, foot traffic in McDonald's U.S. restaurants climbed by 5% in the same period, the report reveals.
This week, McDonald's temporarily shut down its corporate offices so the company could undergo "restructuring," officials said. The fast-food giant reportedly ordered corporate employees to work from home and to cancel all in-person meetings while it made decisions about their employee status.
So, what's behind the layoffs? McDonald's declined to comment on the situation, so the company's motivation isn't exactly clear.
However, hundreds of employees are expected to be laid off, reports indicate. As corporate jobs are reportedly on the chopping block, the move isn't expected to affect hourly workers who earn the minimum wage.
Speaking of frontline workers, NPR points out that there's a significant shortage of workers in the fast food industry, so the company can't afford to reduce its workforce. It can, however, streamline corporate jobs, making them more vulnerable to cuts, NPR said.
The layoffs come as McDonald's plans to expand its footprint around the world in response to increasing demand. According to The Washington Post, the company plans to add 1,900 locations in 2023 as part of its "Accelerating the Arches 2.0" restructuring plan. The fast food giant has set aside up to $2.4 billion towards capital expenses to complete the task, NPR reported.
Adam Chandler, journalist and author of "Drive-Thru Dreams: A Journey Through the Heart of America's Fast-Food Kingdom," told The Post that the company's decision to cut jobs right now is puzzling to many.
"It doesn't seem to make a ton of sense when you've been performing as well as McDonald's has been performing," Chandler said.
Neil Saunders, managing director of analytics company GlobalData, suggested the move is a preemptive strategy. He told The Post that McDonald's is "essentially getting ahead of potential pressures" on its business with the layoffs.
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