McDonald's lays off 225 jobs as part of cost-cutting

The struggling burger giant, fresh off seven consecutive quarters of declining sales at its U.S. restaurants, notified employees last month of the cuts, which affect workers in multiple departments, a spokeswoman said.

“We do not take decisions that impact jobs lightly, but we committed in May to implement meaningful changes to reset our business, remove layers and find cost efficiencies, and we are acting with a sense of urgency on that commitment,” Heidi Barker Sa Shekhem, the spokeswoman, said in a statement. Workers who lost their jobs will remain on the payroll through mid-September, she said.

With the latest round of cuts, McDonald's has laid off at least 263 in its Oak Brook offices since December. McDonald's laid off 63 workers in late December as part of a $100 million cost-cutting effort, and 65 at the end of January as part of a major restructuring timed with the arrival of new CEO Steve Easterbrook, who has pledged to remove layers of management to boost efficiency and cut costs.

Easterbrook in May hinted at the scope of the restructuring, suggesting a large-scale overhaul of the business and reporting structures. The change, he said at the time, "is about restructuring and delayering. We're putting the right people in the right places. ... We'll be conducting an additional review of our corporate functions in the coming weeks and reducing (general and administrative expenses) as we look to align our support more closely with the new structure."

In addition to the January cuts, dozens of McDonald's employees have left the company in recent months, many of whom declined to accept new—or in some cases lesser—positions, sources have told Crain's.

About 90 McDonald's employees overseas also will lose their jobs, the result of a global enterprise reorganization that eliminated layers of workers in Europe and Asia.

McDonald's CFO Kevin Ozan also referenced the cuts on the company's second-quarter earnings call on July 23. He said the layoffs "were right for the business and will result in a leaner, more-agile organization that can better respond to market conditions and most importantly, our customers. The rapid execution of these resourcing decisions is an example of our sense of urgency to reset our business and change the trajectory of our financial performance.”

The fast-foot chain said last month that profit declined 13 percent to $1.2 billion in its most-recent quarter, the result of a dropoff in customers at its U.S. restaurants. Sales fell 0.7 percent to $6.5 billion.

McDonald's employed 420,000 people worldwide, including its company-owned restaurants, as of Dec. 31. The figure excludes people working at franchised locations. It has about 2,100 employees in its home offices in Oak Brook.