McDonalds Laying Off Workers. “..battered by price wars..will cut layers of managers as part of a half-billion-dollar plan..” By Todd Horwitz Chief Strategist, BubbaTrading.com

 

McDonald’s Corp., battered by price wars and struggling to revive its U.S. burger business, said it will cut layers of managers as part of a half-billion-dollar plan to shrink administrative expenses by the end of next year. 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 to all U.S. employees, suppliers and franchisees, McDonald’s USA President Chris Kempczinski said the Golden Arches would be restructuring its regional offices around the country, The Wall Street Journal reported Thursday. “I recognize that change is difficult, and that eliminating layers within our organization means some employees will ultimately exit our system,” Kempczinski said in the memo, according to The Wall Street Journal.

Kempczinski did not elaborate on the number of positions that would be reduced, but said that the company would provide more details during its town hall meeting June 12.

“We are always evaluating ways to better serve our customers and continue to grow our business,” Terri Hickey, a spokeswoman for McDonald’s, told CNBC via email. “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 a path to being more dynamic, nimble and competitive.”

“These planned actions are consistent with our previously announced $500 million G&A targeted savings, which we expect to achieve by the end of 2019,” she said. The news comes just days after McDonald’s opened its new headquarters in Chicago

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Todd “Bubba” Horwitz

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Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.