Member Article

McDonald’s in major corporate shakeup after ‘poor performance’

McDonald’s has announced plans to shake up the company’s global corporate structure with the aim of shaping “McDonald’s future as a modern, progressive burger company”.

The fast food giant’s chief executive, Steve Easterbook, admitted yesterday that the company is “not on our game” while noting that “the reality is our recent performance has been poor. The numbers don’t lie.”

Easterbrook, who is British and was appointed chief executive on 1 March, said: “The message is clear we are not on our game … We must improve, or we will be selling our customers short and leaving open opportunities for competitors.”

The 47-year-old father-of-three said the turnaround plan was focused on creating a leaner management structure with more “hard-edged accountability” that was less built around geography and more on “commercial logic”.

He continued: “In the last five years, the world has moved faster outside the business than inside,

“We’d like less simple talk of millennials [people born between 1980 and the mid-2000s] as though they are one simple group with shared attitudes.”

The company also announced it would be focusing more on its more profitable regions - namely the US, which brings in 40% of operating income.

Mr Easterbrook also said its top international markets, such as Australia, Canada, France and the UK, would become a priority.

He said: “While we continue our efforts to regain business momentum through our turnaround plan and improve sales at our more than 36,000 restaurants around the world, our current performance reflects the ongoing pressures of the business, which we expect to persist through at least the first half of the year,

“We are taking decisive and necessary action to drive foundational improvements in the business and position the company for long-term growth.”

The company also plans to cut $300m in costs by 2017 and Easterbrook noted it is too early to say how that would affect jobs.

McDonald’s also plans to increase the proportion of restaurants franchised globally over the next four years to 90% from 81%.

The new corporate structure will be led by: Mike Andres, who will continue as president; McDonald’s US, Doug Goare, president McDonald’s Europe, will become president of international lead markets; Dave Hoffmann, president of McDonald’s Asia/Pacific, Middle East and Africa (APMEA) will become president of high-growth markets. Ian Borden, chief financial officer of the APMEA region, will become president of foundational markets.

As of 1.30pm yesterday, McDonald’s shares were down 0.9% to $96.93.

This was posted in Bdaily's Members' News section by Ellen Forster .