The video taken by Mercy For Animals showed workers, among other things, burning beaks off young chicks, The Huffington Post reported.
The film also showed dead hens rotting in cages where other hens were still laying eggs.
The New York Daily News said Sparboe, the fifth largest egg supplier in the United States, was issued a letter by the Food and Drug Administration warning the company of 13 health-code violations.
"Sparboe has never had a single egg or chicken detected with Salmonella. There was no cause for any enforcement action," company spokesman Ken Klippen, said.
"We have a zero tolerance policy [on animal abuse]. People who violate that policy, we take very seriously," Klippen said.
The company said it had fired the employees shown in the film.
McDonald's said the behavior on the film was "disturbing and completely unacceptable."
"McDonald's wants to assure our customers that we demand humane treatment of animals by our supplies," the restaurant chain said in a statement.
"Based upon recent information, we have informed our direct supplier, Cargill, that we are no longer accepting eggs from its supplier, Sparboe. This decision is based on McDonald's and Cargill's concern regarding the management of Sparboe's facilities," the statement said.