McDonald’s Turnaround Plan in US Includes Layoffs

McDonald’s is modernizing its restaurants through installing kiosks for ordering, making the drive-thru experience better and adding curbside pickups.

Through this process of turning the business around, McDonald’s is also preparing to make some layoffs of its employees as it restructures its U.S. business in order to be more profitable.

The president of the company sent an email out to employees, franchisees and suppliers Wednesday saying that the restructuring process will result ultimately in some employees exiting the system.

It is not known what the actual scope of the employee layoffs is, but next week they are going to be detailed more during a meeting. A spokesperson for McDonald’s would not come out and confirm the expected layoffs through a statement on Thursday, but did confirm that the company was putting a new field structure in place.

The statement from the spokesperson read that the company was putting a new field structure into place for the U.S. that would support its franchisees better and would ensure that McDonald’s is able to continue on its path to being more nimble, competitive and dynamic.

These actions that have been planned are consistent with the company’s previously announced targeted savings of $500 million, which is expected to be reached before the end of next year.

During Thursday’s session on Wall Street, McDonald’s shares were up.

McDonald’s has worked diligently to address the different challenges it has in its business operations in the U.S. that it has struggled with for the past few years. It introduced several new offerings and it remodeled its franchise locations to help fight declining profitability.

The store visit count in the U.S. declined by over 5% during the fiscal first quarter for McDonald’s as its rivals introduced new deals for their breakfast offerings.

Nonetheless, sales were higher by close to 3% at locations in the in the U.S., due to its new premium menu offerings as well as higher prices. However, growth in its other markets continues to outpace that of its domestic sales.