Chicago, Illinois-based McDonald’s, the world’s largest restaurant chain is embarking on a significant restructuring plan in response to declining revenues, changing consumer preferences, and stiffer competition. The target is said to be $500 million in cost reductions by the end of 2019. CEO Chris Kempczinski announced a restructuring plan designed to “eliminating layers within our organization” which is likely to result in the layoffs of hundreds of employees in middle management.
CEO Chris Kempczinski: “I recognize that change is difficult, and that eliminating layers within our organization means some employees will ultimately exit our system.”
McDonald's spokesperson Terri Hickey: "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.”
McDonald’s has attempted various “fixes” over the last three years and this restructuring is an ongoing effort to find the right balance between business and administrative staffing and costs. If you are in middle management, the handwriting is on the wall.
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