More bad news for McDonald's: Today, the company announced it fired 225 corporate employees. According to the AP, this move is "part of a push" to recapture its once profitable fast food business.
Employees were notified of their termination last month. About 120 of those laid off were based at the company's Oak Brook, Ill. headquarters; the rest were overseas. McDonald's shares are again down after the news broke earlier this afternoon. This is the largest round of layoffs the company has experienced in years; late last year about 130 jobs were cut. In less than nine months the company has cut a total of 350 jobs according to the AP.
McDonald's labor force has been under intense scrutiny lately. Last December, the National Labor Board found McDonald's guilty of retaliation against striking employees. Because of its size and name recognition, the chain has become the target of Fight for $15, an independent organization which has banded tens of thousands of fast food workers together to protest and raise awareness for the need for higher minimum wages. The difference in pay between McDonald's CEO and its average cashier has never been more stark: Though the burger chain brings in billions, it still pays most of its employees the federal minimum wage of $7.25 while executives at the company make seven figures. In response to widespread protests McDonald's raised wages by $1 at company-owned locations, but this affected only 90,000 workers, a fraction of its 1.9 million workforce.
Today's corporate restructuring does not come as a surprise to shareholders. In January, the company fired its CEO and promoted marketing executive Steve Easterbrook to the top spot. The shake up came after months of sluggish sales and disappointing growth. In April, Easterbrook announced a turnaround plan in broad strokes, acknowledging the tight financial position the company was in, as well as increased competition in the U.S. and abroad. Coupled with news reports of foreign objects found in its food, and a greater emphasis on healthy eating in much of the developed world, it's no wonder McDonald's has now experienced a year of disappointing sales. Is this latest round of layoffs a sign of desperation from a company that is experimenting with everything from kale to coffee to digital ordering kiosks?
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