McDonald’s is closing its US offices and laying off hundreds of employees this week. Reporter Adam Chandler explained what the cuts mean on Morning Edition.
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McDonald’s is closing its US offices and laying off hundreds of employees this week. Reporter Adam Chandler explained what the cuts mean on Morning Edition.
Justin Sullivan/Getty Images
In recent corporate shakeups, Amazon, Meta and Disney are all downsizing their workforces. Now it appears that even the iconic burger chain that has become synonymous with fast food around the world is feeling the strain, as McDonald’s joins the list of companies announcing layoffs that will affect hundreds of employees.
As part of a much larger company restructuring, McDonald’s Corp. recently informed employees of impending layoffs and temporarily closed all of its U.S. offices this week. The exact scale of layoffs is not yet known.
The news may come as a surprise to fast food fans who spent big at McDonald’s last year. According to McDonald’s most recent annual report, the company’s global sales will grow nearly 11% in 2022, with nearly 6% of that coming from the US.
So what’s behind the layoffs and how might they affect the broader economy?
NPR’s Steve Inskeep asked journalist Adam Chandler, who wrote the book Drive-Thru Dreams. A journey through the heart of America’s fast food kingdom.
Selling fast food is getting more and more expensive
- McDonald’s plans to spend up to $2.4 billion in capital expenditures, which will include building 1,900 additional restaurants worldwide.
- Despite raising menu prices last year in response to inflation, McDonald’s customers didn’t seem to notice as foot traffic increased 5% in 2022.
- According to CEO Chris Kempczynski, lower-income customers spend less per visit but visit McDonald’s more often.
- Last year, Kempczynski predicted a “mild and moderate” recession in the US and a “deeper and longer” recession in Europe.
Raising the minimum wage is not a problem
The layoffs at McDonald’s are expected to have a more significant impact on corporate workers than front-line workers, who are more likely to earn the minimum wage.
Frontline workers at McDonald’s are less vulnerable than white collar workers
There is a significant shortage of workers in the fast food sector. McDonald’s can’t afford to cut its workforce, but there may be some corporate roles that could be “fixed,” making them more vulnerable to layoffs.
Layoffs will affect small business owners
Because most McDonald’s restaurants are not directly owned by the corporation, but instead are franchised.
This story was digitally edited by Majd Al-Waheydi.