McDonald's temporarily closes U.S. offices ahead of layoffs

This photo shows a logo of a McDonald's restaurant in Havertown, Pa., on April 26, 2022. (AP Photo/Matt Rourke)

NEW YORK — McDonald's has closed its U.S. offices through Wednesday and told its corporate staff to work remotely as it prepares to announce a round of layoffs.

In a memo to workers posted on the website TheLayoff.com, the Chicago-based burger giant said it wanted to "ensure the comfort and confidentiality of our people during the notification period" and would hold all notification meetings virtually. It told international corporate staff to follow guidance in their particular regions.

The company said in the memo that the layoffs are intended to make McDonald's more efficient.

"We have a clear opportunity ahead of us to get faster and more effective at solving problems for our customers and people and to globally scale our successful market innovations at speed," the company said.

McDonald's declined to comment on the memo or the layoffs on Monday. The memo was first reported by the Wall Street Journal.

Though the U.S. labour market remains strong, layoffs have been mounting, mainly in the technology sector, where many companies over-hired after a pandemic boom. IBM, Microsoft, Amazon, Salesforce, Facebook parent Meta, Twitter and DoorDash have all announced layoffs in recent months.

There have been cuts in other sectors as well.

Most of those job cuts are at corporate offices. There are still shortages of workers to fill service jobs, such as those at McDonald's restaurants.

Policymakers at the Federal Reserve have forecast the unemployment rate may rise to 4.6% by the end of this year, a sizable increase historically associated with recessions.

McDonald's has more than 150,000 employees in corporate roles and in company-owned restaurants. About 70% of those employees are based outside the United States.

McDonald's shares rose just under 1% Monday. The company's revenue was flat at US$23.2 billion for the full year in 2022, but its net income fell 18%, partly due to the sale of its business in Russia.

McDonald's warned employees in January that layoffs would be coming as it tried to get more nimble and break down walls between its global markets. In a January memo to employees, McDonald's President and CEO Chris Kempczinski said the company was evaluating roles and staffing levels in various parts of the company.

"We have historically been very decentralized in some areas where we reinvent the wheel way too often," Kempczinski said during a January conference call with investors. "And I think the other thing I've seen is we haven't been as sharp around our global priorities, and so there's been proliferation of priorities."

In one market, Kempczinski said he had recently discovered a list of 300 separate priorities.