In addition to layoffs, McDonald’s cost cutting binge includes demoting employees and reducing pay


McDonald’s reduced some employees’ compensation and titles as part of the restructuring this week that cost hundreds of workers their jobs, according to a person familiar with the situation.

The Chicago-based fast-food giant offered some employees the opportunity to remain on the payroll with changes to their compensation packages, including items such as bonuses and equity awards, said the person, who asked not to be named discussing private information.

McDonald’s closed its offices for a few days earlier this week to have career conversations with all corporate employees, including those being let go.

The company said in January that it planned to cut corporate jobs and eliminate certain initiatives, even as it accelerates new store openings. The job cuts would be final by April 3, McDonald’s said at the time. It had about 150,000 employees at the end of 2022, according to data compiled by Bloomberg.

The Wall Street Journal reported earlier Friday on the changes in compensation packages.

Despite a wave of layoffs that paint a gloomy picture of the tech sector, companies are hiring. A lot.

Job postings for tech positions reached nearly 316,000 in March, the highest total in seven months, according to CompTIA’s Tech Jobs Report, issued Friday.

“The headline focus on Big Tech overshadows the enormous base of the tech pyramid,” Tim Herbert, CompTIA’s chief research officer, told MarketWatch. “Tech services, dominated by small and midsize companies, have filled the gap in hiring.”

Companies in the administrative and support, manufacturing and finance and insurance sectors were particularly active, Herbert said.

Tech jobs increased by 197,000 in March and employers stepped up activity for future hiring, running counter to signals that the labor market may be cooling off, according to the analysis by CompTIA, the nonprofit association for the information-technology industry and workforce.

However, CompTIA’s report did show that tech-sector employment — all workers on the payrolls of tech companies — declined by 839 jobs in March amid a wave of layoffs from the likes of Alphabet Inc.’s GOOGL, +3.78% GOOG, +3.76% Google, Salesforce Inc. CRM, -1.41%, Facebook parent Meta Platforms Inc. META, +2.18%, Microsoft Corp. MSFT, +2.55%, Intel Corp. INTC, -0.06% and others.

“Big Tech is still ahead in employment numbers because they hired so many people over the last year or so,” Herbert said. “Now they need to signal to the market that they are cost-efficient and are improving profit margins.”

The overall U.S. new jobs report showed 236,000 additions in March and a drop in unemployment to a historic low of 3.5%.

The latest jobs report is in, and the good news is Federal Reserve policy on inflation appears to be working. The bad news is Fed policy on inflation appears to be working.

The March 2023 jobs report reveals that the U.S. economy added 236,000 jobs during the month – roughly in line with expectations. A trend does appear to be emerging as the U.S. central bank’s efforts to slow the economy down and tame inflation appear to finally be working on the labor market, with some companies feeling the effect of increased business costs.

While that will calm the nerves of monetary policymakers, it does raise the prospect of some economic pain ahead – not least for those who will indeed lose their jobs. And for the wider economy, it could also signal another slightly unwelcome phenomenon: the “growth recession.”

Growth recessions occur when an economy enters a prolonged period of low growth – of say 0.5% to 1.5% – while also experiencing the other telltale signs of a recession, such as higher unemployment and lower consumer spending. The economy is still expanding, but it may feel just like a recession to regular people. Some economists consider the 2002 to 2003 period to have been a growth recession.

For now, the job market is still relatively robust. In March, the unemployment rate even edged downward very slightly to 3.5% from 3.6% the previous month.

Effectively, in terms of job additions, this still-healthy increase nevertheless does suggest a slowdown in hiring. The 236,000 jobs added in March is down from the 326,000 and 472,000 added in February and January, respectively.

A slowdown has been anticipated and suggested by other data for some time now. Eye-grabbing headlines about bank failures and layoffs in the tech sector also signal a slowdown.

Other data hint at more employment pain to come. The February Job Openings and Labor Turnover report from the Bureau of Labor Statistics posted a job openings number below 10 million for the first time since May 2021 – a downward trend that has been in place since December 2021, when openings peaked at 11.8 million.

Meanwhile, the U.S. Census Bureau recently reported that new manufacturing orders fell by 0.7% in February 2023. Indeed new orders declined in three of the last four reported months, and prior to that, orders growth had been sluggish at best.

In terms of sectors, job declines in construction – down by 9,000 – and manufacturing – down by 1,000 – are as expected, as both sectors are sensitive to interest rate increases.

It is quite likely that such declines will continue in coming months.

Other sectors posted substantial gains. Health services were up 50,800, and leisure gained 72,000. However, these gains are still smaller than in previous months.

This report seems to suggest that Fed actions to slow the economy are working, even though inflation still remains well ahead of its 2% target.

I believe this probably won’t significantly alter Fed policy. Indeed, it suggests that the year-old campaign of using aggressive interest rate hikes to tame inflation appears to be paying dividends. The slow drip of data proving this allows monetary policymakers to manage the economy as they try to provide a so-called “soft landing.”

If the April jobs report is similar to March’s, and barring any unusual events between now and its release in May, I expect the Fed to inch rates up very slowly, likely by another quarter basis point.

Where this leaves the economy as the year progresses, only time – and more data – will tell. But from where I stand, the economy looks to be heading toward a downturn by the fall. The question is whether it will take the form of a mild recession – which will include periods of economic shrinkage – or whether, as I suspect, it will be a low-growth recession. Either way, it will involve some pain.

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