Dive Brief:
- McDonald’s will “evaluate roles and staffing levels” ahead of “difficult discussions and decisions” around jobs the company expects to finalize by April 3, CEO Chris Kempczinski wrote in a message sent to employees on Friday and reviewed by Restaurant Dive.
- McDonald’s didn’t disclose how many employees could be impacted by this potential corporate restructuring.
- This evaluation is part of an initiative dubbed “Accelerating the Organization,” which includes the promotion of four executives to marketing, transformation, franchising and other leadership roles.
Dive Insight:
Accelerating the Organization is part of the second iteration of a broader suite of McDonald’s strategic goals, or “Accelerating the Arches 2.0.” Kempczinski wrote in his message to employees that the company must “scale [its] innovations faster than ever before” to meet elevated demand that the chain has attracted in recent years.
The company’s focus on organizational efficiency is intended to “objectively assess areas we can do better,” Kempczinski said, stating that the company “cannot stand still.”
The potential for job cuts may come as a surprise considering McDonald’s recent performance, which has outpaced many of its competitors — even as restaurant companies shake off the worst of the pandemic’s business disruptions so far.
In Q3, McDonald’s posted U.S. same-store sales growth of 6.1% alongside positive guest counts. This growth came despite average menu price hikes of roughly 10% year over year. Consumer trends are shifting, though, and reevaluating corporate strategy and structure could help McDonald’s remain nimble as it responds to diner needs amid growing external pressures, such as inflation and wage growth.
On its Q3 call, Kempczinski said that McDonald’s is capturing diners who are trading down from higher-priced restaurant segments, a trend that could help the chain’s performance if a recession develops in 2023.
“Our vision for this new business unit goes well beyond what we have established so far — allowing us to leverage economies of scale while improving the effectiveness and efficiency of end-to-end processes,” Kempczinski wrote. “GBS will initially incorporate the transformation work already underway in our Finance and Global People functions. Eventually, we expect GBS to also include aspects of Marketing, Development, Supply Chain and Technology.”
McDonald’s recent executive promotions, effective Feb. 1, also could help set the table for fresh strategy.
Morgan Flatley, the chain’s global chief marketing officer, has been promoted to EVP, global chief marketing officer and new business ventures. Skye Anderson, McDonald’s U.S. West Zone president, will be promoted to the role of president, global business services.
Andrew Gregory, SVP, global franchising officer, will be promoted to SVP, global franchising and development. Spero Droulias, SVP and CFO of McDonald’s USA, will take the role of SVP, chief transformation officer.
