Yesterday the Wall Street Journal reported that fast-food giant McDonald's is set to embark on a fresh set of management layoffs that are intended to wring out $500 million in unnecessary costs no later than December 31, 2019. The layoffs will be focused on flattening management within the company's regional offices nationwide.
According to a statement by McDonald's spokeswoman Terri Hickey:
"We are always evaluating ways to better serve our customers and continue to grow our business. With that in mind, we are putting into place a new U.S. field structure that will better support our franchisees and will ensure McDonald's continues on a path to being more dynamic, nimble and competitive."
According to the Wall Street Journal article, exact plans for the layoffs will be revealed during the course of McDonald's town hall meeting, currently scheduled to take place on June 12th.
With the burger market getting increasingly competitive, fast-food companies like McDonald's need to constantly find ways to cut the fat from their organizations without cutting the quality of their products. In fact, the high quality of food at burger restaurants such as In-N-Out and Shake Shack have set the bar high.
Time will tell whether or not cutting layers of management from the organization will put McDonald's on a path to greater profitability and growth, or if perhaps some of those managers were critical to the company's ongoing success.
Whether or not that turns out to be the case, the planned layoffs have pleased investors. According to Reuters, McDonald's share price were up 2.2 percent after the job cuts were revealed.
And, of course, North Korea may soon have a McDonald's of its own, depending on how the summit between President Trump and Chairman Kim Jong-un goes.