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McDonald’s Closes American Corporate Offices Amid Expected Layoffs

McDonald’s is temporarily shutting down its U.S. offices this week as it prepares to announce layoffs across the company’s corporate structure.

In an email sent out to employees and obtained by the Wall Street Journal, the fast-food corporation asked staff to work from home from Monday to Wednesday so that decisions could be communicated virtually.

In January, the chain said it was going to make corporate staffing decisions by April. “Some jobs that are existing today are either going to get moved or those jobs may go away,” Chief Executive Officer Chris Kempczinski said in an interview.

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McDonald’s has about 45,000 employees in the U.S., including in its corporate offices and in its stores. It is the latest company to announce layoffs in 2023. Workers in the technology, finance, and media industries have experienced the biggest cuts amid fears of a dwindling economy. (The current labor market remains relatively stable as unemployment sits at a rate of 3.6%, according to the U.S. Department of Labor, though that number is expected to rise to 5.1% by the end of 2023.)

“With the war in Ukraine and all the world in, or entering into recession, their companies are trenching as demand is falling, belt tightening is going on,” John Van Reenen previously told TIME. “One part of this is just a general reflection of what’s happening in the economic situation around the world.”

More than 90% of McDonald’s stores worldwide are owned by franchisees and not McDonald’s Corporation, meaning that the corporate office closure and layoffs are not likely to directly impact customers who order from the fast food giant in the short term.

In January, McDonald’s reported increases in its quarterly sales, but says increasing costs were cutting profit margins at its restaurants. Indeed, grocery prices are at a high with a carton of eggs costing an average of $4.25 in January. And the current consumer price index for food is up 6% since last February, as food prices are still expected to grow at above-historical rates.

Kempczinski said that the company would look to open new restaurants to increase profits in light of the economic circumstances, the Wall Street Journal reports, while sizing down on operation costs more broadly.

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