McDonald’s plans to reorganize, cut jobs and speed up the opening of restaurants

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McDonald’s is planning job cuts and a reorganization as the company refocuses its priorities on accelerating restaurant expansion, CEO Chris Kempczynski told employees Friday.

The fast food giant said the job cuts are not a cost-cutting measure, but are intended to help the company innovate faster and operate more efficiently. According to a memo from Kempczinski, as part of the reorganization, the company will deprioritize and put some initiatives on hold. It is not clear what these projects are.

“Today we are divided into bunkers with a center, segments and markets,” Kempczynski wrote. “This approach is outdated and self-limiting – we try to solve the same problems multiple times, don’t always exchange ideas, and can be slow to innovate.”

The McDonald’s organization is currently divided into three segments: US, International Managed Markets, and International Licensed Development Markets. The company operates in 169 markets worldwide.

Also on Friday, McDonald’s said it would accelerate its plans to develop new restaurants.

“We must accelerate the pace of our restaurant openings to fully meet the increased demand we have created over the past few years,” Kempczynski said in a memo.

McDonald’s hasn’t previously released a forecast for how many new restaurants it plans to build in 2023, but the company said in November that the new divisions will boost system-wide sales in 2022 by about 1.5%.

The company has not yet decided how many new restaurants it will build and how many jobs it will cut as part of the reorganization. Kempczynski said the company will finalize and begin reporting layoff decisions by April 3.

Kempczinski also announced several internal promotions that will take effect on February 1 to help the company implement its new strategy. Global Chief Marketing Officer Morgan Flatley will also oversee new business ventures. Sky Anderson will move from McDonald’s West Zone in the US to Global Business Services. Andrew Gregory’s role as Director of Global Franchising will also include leading global development, with Spero Drulias moving from McDonald’s USA CFO to Chief Transformation Officer.

Shares of McDonald’s rose more than 2% in late trading on Friday. The company is expected to report fourth-quarter earnings on January 31st.

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