McDonald's Reportedly Plans Corporate Job Cuts, 'Eliminating Layers'

(RTTNews) - McDonald's Corp. (MCD) will cut layers of managers as part of a half-billion-dollar plan to shrink administrative expenses by the end of next year, the Wall Street Journal reported.

The latest reorganization comes as the fast-food chain has been working to turn around its crucial U.S. division for more than three years.

The fast-food market has become increasingly competitive as rivals have come out with aggressive deals to attract customers. McDonald's has been losing market share to other chains and has lost the loyalty of some of its most cost-conscious guests, according to analysts.

In an email message to all U.S. employees, suppliers and franchisees this week, McDonald's USA President Chris Kempczinski reportedly said the company is restructuring regional offices around the country. "I recognize that change is difficult, and that eliminating layers within our organization means some employees will ultimately exit our system," he reportedly said in the memo.

In a video message that accompanied the memo, he reportedly said the layers between field consultants and Chief Executive Steve Easterbrook will be reduced to six from eight.

Kempczinski didn't mention the scope of the head-count reduction but is expected to provide additional details during a town-hall meeting Tuesday.

The company has already cut an undisclosed number of corporate jobs in the last two years and said it is reinvesting some of its cost savings in technology, such as digital ordering, that it believes will lead to growth. Mr. Kempczinski explained in the written memo that the latest changes will enable McDonald's to become a nimbler organization that can make decisions more quickly.