CHICAGO, Oct. 18 (UPI) -- Fast-food giant McDonald's Corp. said it would cut 10 percent of its U.S. headquarters and corporate field staff in the second home-office decentralization program in three years.
McDonald's USA eliminated 525 jobs in 1998 and is expected to trim another 500 to 700 positions and reduce the number of divisions from five to three. The corporation will have 21 regions when the restructuring is completed, down from 37, as it struggles to control expenses, boost profits and improve the image of its restaurants and food offerings.
The company did not say how big a charge it would take for layoffs and severance packages.
"The reorganization of the U.S. business is part of an ongoing change process designed to grow McDonald's global business and to ensure that McDonald's is more agile, more competitive and more strategic than ever before," said Chairman and Chief Executive Officer Jack Greenberg in a statement Wednesday.
The cost-cutting initiative followed three consecutive quarters of lower earnings, which McDonald's blamed on the economic downturn, mad cow beef scares in Europe and the strong U.S. dollar overseas.
McDonald's Thursday reported third-quarter earnings of 42 cents per share and a 6 percent increase in revenues for the quarter with improved operating income from Europe. Shares were down 36 cents to $29.04 on the New York Stock Exchange in early trading.
McDonald's USA also will add five new managers to its leadership team, including a chief restaurant officer, chief support officer, chief transformation officer and brand concept development officer.
Each of the 21 regions will have a vice-president of quality, service and cleanliness and a spokesman said there were no plans to close any of the roughly 2,500 owner/operator franchises in the United States.
