McDonald's reveals restructuring plan
McDonald’s revealed the details of its restructuring plan on Tuesday, saying it will reduce the chain's corporate headcount and increase the support it gives to its franchisees.
McDonald’s held a town hall meeting, and the company sent a memo to employees ahead of the meeting, confirming that some positions will be eliminated, but pledging more support for U.S. employees and franchisees.
In the memo, which was seen by The Wall Street Journal on Monday, Christopher J. Kempczinski, USA President at McDonald's, said that employees who will be laid off will be notified by June 28. He didn’t report how many would lose their jobs.
When it comes to the other changes, Kempczinski said the company would create a single point of contact to help franchisees get the resources they need. The company will also create a new executive position called chief transformation officer to oversee the changes.
These details follow reports last week that the company would lay off some employees as it looked to restructure its U.S. business to enhance profitability. The Wall Street Journal initially reported the potential layoffs. FOX Business reached out to the company and a McDonald’s spokesperson stopped short of confirming the layoffs in a statement but did confirm the company was putting in place a new “field structure.”
“We are putting into place a new U.S. field structure that will better support our franchisees and will ensure McDonald’s continues on a path to being more dynamic, nimble and competitive. These planned actions are consistent with our previously announced $500M G&A targeted savings, which we expect to achieve by the end of 2019,” Terri Hickey, a McDonald’s spokesperson, said to FOX Business via email.
McDonald’s posted a document on its website on Monday detailing that it expects to record a pretax charge of $80 million to $90 million in the second quarter from employee severance costs and other costs associated with closing field offices. The company should complete the transition to the new field structure in the third quarter.
FOX Business’ Brittany De Lea contributed to this article.