McDonald's to Cut 525 Employees In First Reduction in Its History
McDonald's Corp., cutting jobs for the first time in its 43-year history, said it will eliminate about 525 employees, or 23% of its home-office work force, over the next 18 months.</br></br>The cuts, intended to shrink overhead and bureaucracy while increasing productivity, will affect "quite a few" in McDonald's 171-person U.S.-based officer corps along with lower-level workers, a company spokesman said. Some international-area employees also will leave the fast-food company.</br></br>Saying it was still calculating the cost and potential savings of the downsizing, McDonald's put off disclosing the financial impact until it releases second-quarter earnings next month. Several Wall Street analysts contacted yesterday had only rough estimates on a potential charge, ranging from $20 million to several times that.</br></br>The job cuts come as the Oak Brook, Ill., concern seeks to regain sales and profit momentum, particularly in the U.S., after two years of lackluster results. In one of his first announcements since being named president and chief executive officer-elect, Jack M. Greenberg said it is "necessary to make these changes to refocus and realign with our restaurants and . . . bring home-office resources closer to them."</br></br>Although the company said it was reducing its headquarters staff by 525 positions, about 100 of those posts are already vacant.