There is a high level of uncertainty among large companies in the US economy. This concern is transversal, although it is true that it affects some sectors more than others. In this sense, the technology industry is clearly the hardest hit by a combination of economic elements, among which the rise in interest rates and inflation stand out. As a result, firms like Meta, Twitter or Amazon have carried out massive layoffs.
These staff cuts have even been announced in the dating app industry. Now, it looks like the fast food industry is going to join this wave of layoffs soon.
On the exit ramp. According to an article in The Wall Street Journal published on April 2, McDonald’s has announced the temporary closure of its offices in the United States during the week of Monday, April 3 as it prepares to communicate to its employees a staff cut. Employees must work from home from Monday to Wednesday of this week, as indicated by an internal message sent by the company to its employees last week.
holy dismissals. “During the week of April 3, we will communicate key decisions related to the positions and levels of the staff in the organization,” said the message to which the North American newspaper had access. Throughout those days, McDonald’s urged employees to cancel all their scheduled face-to-face meetings.
Prior notices. In October 2022, Chris Kempczinski, CEO of McDonald’s, told McDonald’s investors that the company expected to go through a “mild to moderate” recession in the United States and a similar one in Europe that would be “potentially deeper and longer”. as reported by Restaurant Business. Later, in early January of this year, Kempczinski said in an interview with The Wall Street Journal that “some jobs that currently exist will be moved or may disappear.”
In fact, in a message sent to employees on January 6 of this year, the company indicated that it would speak with the staff during the week of April 3, in which difficult decisions would be made, according to ABC News.
Face. In that message sent on Three Kings Day, Kempczinski pointed out that the company was developing its activity “at a high level”, but that they could do better. In this sense, the 2022 results report presented by McDonald’s at the end of January showed apparently positive figures for the fast food chain. According to the document, worldwide comparative sales increased by more than 10% and comparative consumer spending increased by 5%.
The cross. However, the report showed that the company’s profits had fallen by 18%: from $7.545 million in 2021 to $6.1774 million in 2022. This reflected the impact of the war in Ukraine, with the subsequent closure of restaurants in Russia.
Clown stamp. On the other hand, according to the text, the company expected the “inflationary pressures” to continue during 2023. In addition, although he acknowledged his satisfaction with the results obtained, Kempczinski was demanding: “We are proud of our strong and continued performance, but we are not satisfied. That’s the McDonald’s hallmark.”
More low-income customers. In this sense, there is an element that the firm can include to design its next strategy: loyalty among low-income consumers increased last year, as reported by Ian Borden, McDonald’s CFO in October 2022.
The usual solution. Beyond McDonald’s positive rhetoric, the truth is that the company is concerned about falling profits, despite the fact that they continue to be very high, and is planning to correct the situation by laying off workers. This week, the firm will announce how many of its approximately 150,000 employees worldwide will be affected by these layoffs.
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