McDonald's temporarily shuts its U.S. offices and prepares layoff notices | Hacker News Reader

McDonald's temporarily shuts its U.S. offices and prepares layoff notices

cnbc.com

45 pointsel_duderino90 comments

It's starting.

Most of the rest of the U.S. thinks the layoffs that have hit the tech sector are because they overextended and made poor decisions during the stimulus-fueled boom. That may be true, but a falling tide grounds all boats. We'll see some big names in the economy do mass layoffs this summer - that's the whole point of the Fed's actions.

My marker for when it's time to re-enter the stock market is when an S&P 500 company goes bankrupt.

But is this a true falling tide or simply McDonalds pandering to investors' expectations? That is, look ma, we're so serious and worthy we're laying off people too. Imagine getting paid the big bucks to make such decisions.

Bankrupt? Better to look for companies where leadership runs counter to "prevailing conventional wisdom" and actually leads for others to follow.

Great point. The article doesn't mention of McDonalds is profitable. I'd wager it is even without the layoffs. On one hand, doing layoffs may make investors happy, on the other hand if we get a recession because a bunch of profitable companies keep laying everyone off, then maybe that's not so great for investors after all.

I think McDonalds stock just did really well. This is surprising to me. It's literally at it all time high.

I believe that's called The Tragedy of The Commons.

McDonald's only made $6,000,000,000+ last year on $23+ billion in revenue at a ~35% profit margin.

They reversed the downward trend in revenue (which occurred simultaneously with a tremendous increase in profitability) and bounced back from 2020 magnificently.

Their stock price has ONLY roughly doubled in the last five years and their dividend has ONLY doubled in the last 10.

Obviously that is not good enough so they're going to lay off a couple thousand people to get that margin up by two points.

Pathetic.

This is 100% a stock juicing play. I'm willing to bet there's a cadre of executives who all came on at the same time pre-pandemic (during the revenue turnaround) whose options are maturing and the price isn't where they want it to be because of the pandemic. McDonalds is as healthy a company as its food is unhealthy.

Executives will destroy lives at random as a show of good will to the capital class. Time to bring back the guillotine.

My only hope is that one day we have a media staffed by legitimate journalists that would convey such details.

It's obviously not illegal. But the more the (consumer) market knows, the better its decisions on where to open their wallets.

We will see. I have no doubt there will be more layoffs, but the pending/potential recession feels like an excuse. McDonalds is plenty profitable.

Have you been inside a McDonald’s recently? The prices are outrageous. I don’t see how the average person could afford to eat there.

This is true of all restaurants. In fact, I would expect McDonald's to be a beneficiary of this as consumers replace more expensive options with McDonald's.

Wouldn’t it be cheaper to just eat at home? A full meal for three people at McDonald’s in my area is around $35.

You have to cook. I'm a good cook, but it takes an hour in the kitchen to prepare and average fast meal. (More or less, some meals are faster, some slower)

I do meal prep. I have a set of Pyrex food storage containers that I bought at Costco for $20 and change. I do an hour of cooking and it allows me to have breakfast, lunch, and dinner for three days at a time. It’s hard to imagine what life was like before this.

I like a variety of fresh meals. There is a difference in quality between vegetables you cut just before the meals and what you cut latter. Not everyone is that way, but I am. (this is also one reason I can't stand fast food - it is obviously not fresh.

They're effectively upcharging anyone who buys from them without using their app. If you're willing to use their app and all it entails re: data they get from you, they're still pretty cheap.

In the Bay Area I can get 2x breakfast sandwiches and a large iced coffee for $6.29, taxes included, which is pretty damn cheap. Their Big Macs are regularly 2-for-1 in their app, and accumulate rewards.

I dislike the trend of harvesting all this data using apps, but I also don't really get fast food unless pressed for time.

In the UK the app prices are the same as in-store, except for some occasional offers.

You’re referring to just offers and rewards right, not an across-the-board special set of app prices?

Correct, they're effectively coupons in the app, so various items are discounted, and not just cheaper across the board. Their biggest sellers like the Big Mac and Quarter Pounder are regularly 2x1 though, so not a terrible deal.

That only makes sense if McDonald's is cheap but it's not. Their quality has significantly declined - most are severely understaffed and can't keep workers, leading to crappy product to the consumer. Nicer restaurants offer different things - atmosphere, better quality food, a night out and serve a different market. McDonald's used to be quick, cheap, and good. Not anymore.

McDonald's had cheap, fast, and good "quality." Now it is no longer cheap, it is no longer fast, and expecting a burger properly put together will only set you up for disappointment.

that's it for me as well; when I was a child, McDonald's was the cheap option. Nowadays it's more in the middle of the price range of where I get my food, which is crazy considering what you're getting. It's cheaper and healthier to get Japanese, Thai, or Chinese takeaway.

I’ve entirely stopped eating fast food because every time I go, I’m enraged by how I am charged full service prices for low-quality, greasy, garbage and poor service. I’ll instead make my own food, which is much cheaper and tastes much better. I’ve resigned myself to only eating at restaurants socially, or if they make something better than I can.

I feel the exact same way. I don’t understand how the fast food industry will continue without major changes due to the “low cost” factor being completely evaporated. They cost almost as much as fast casual places these days, yet the quality is nowhere near as much as them. I generally just cook these days, and if I happen to be out and about, if I have the time I’d rather just find a few things from the grocery store than to pay outrageous prices for low-quality food. It’s inconvenient but the prices that are being charged these days make the inconvenience necessary.

FWIW I basically stopped eating at McD's in my 20s and 30s then we've started going again in our 40s. There's one reason: kids. McD's is incredibly kid friendly, from its ubiquity on every street corner and major tourist attraction, to the drive-thru that means you don't need to wake the kids up from their nap when you pick up food, to the online ordering app, to not having to cook, to the kid-friendly menu where it's basically guaranteed there's something they'll eat.

We rarely eat fast-casual nowadays despite being voracious consumers when we were in our early 30s. Our kids don't eat it (so we need to cook separate meals for them), and there's less infrastructure built up around making sure parents never need to go into the restaurant.

I feel like McDonald's has always served the families-with-small-kids demographic - it started in the baby boom and then massively expanded as the baby boomers were themselves having kids. To the extent that the fast food industry is seeing its customer base decline, it's probably because fewer people are having kids. It's likely that childless couples didn't eat at McDonalds in the 80s and 90s either, but being kids then, our only experience tended to be with other families that had kids.

Totally agree. I’m in Portugal now and it’s even more shocking here. It’s €9 for a cheeseburger menu. Meanwhile I can get a menu meal at a local joint for €6.50. And it’s about the same size, much healthier and even had Coke Zero in a glass bottle not the garbage mix from McD. I don’t get it.

> Have you been inside a McDonald’s recently?

The state of your average McDonalds site has extremely little to do with the corporation.

To those who don't know: McD's allows franchising. Your local McD might be Corp or some local group w/ some Corp help.

I have been inside a McDonald's recently. Prices are up but not outrageous. You can still get a meal for under $10. I don't see why an average person cannot afford this. Here's how much Big Mac costs in every state.

https://www.cnbc.com/2023/03/20/mcdonalds-big-mac-prices-sta...

I think most people here grew up with the idea that McDonald's is cheap junk food, but I grew up in a country where it was not, and so my expectations are different.

Many American chain restaurants are commoditized in America, but are not elsewhere.

I think part of this is you need to be using their app and loyalty program to get decent prices. Although to me the entire point of this kind of fast food is you can just pull up into drive through and order while, say, on a phone call, without needing to give it any more thought or start looking for coupons in the app.

We usually use the McDonalds app to accrue points and score discounts.

But prices are up everywhere, so while McDonald’s is expensive now, it’s not like you would be better off in a sit down restaurant. Even eating a salad from the grocery store will set you back six bucks.

What mcd are you shopping at? Mine in Seattle has $0.99 large coffee, BOGO burgers, free ice cream, and half off apple pies. I can purchase 900 calories for less than $7.

Also, if you're familiar with race conditions, you can double use promos.

So the reality with a lot of the mass market fast food like McDonald’s is there’s functionally two ways to look at it: You use the app for deals, and any coupons from circulars you get via mail, and buy only what’s a great deal. Or you get what you want and pay what’s on the board, price be damned.

There were consecutive months this summer where I could get a Spicy McCrispy (Big Mac pricing), a large fry, and any size soft drink for $2.14 with tax, across two transactions 15 minutes apart... every. Single. Day. Or I could get exactly what I might’ve wanted - including a shake - for about $13 and change.

If you want a good deal, you, “play the game.” You can order from a Domino’s and pay $50-60 for two pizzas delivered. Or you use the in-app coupons, pick it up yourself and pay $16.

For $13+ I’d rather cook real food at home for that money. For $2.14? Yeah, I’m up for that.

Oh and the likes of Facebook or Google or Amazon are not?

>but a falling tide grounds all boats.

More like the biggest piece of shit on the water is first to sink in the storm.

Tech was that POS. But other sectors are gonna feel the storm too. But they'll probably do better because smaller proportions of those industries are running on VC monopoly bucks that go tits up when the fed raises rates.

Generally shit floats, but I’ve never observed shit dynamics in a storm.

Market timing is a fool's errand

> the U.S. thinks the layoffs that have hit the tech sector are because they overextended and made poor decisions during the stimulus-fueled boom

That's part of it. The other is there are categories of American white collar work which have always been bullshit jobs, it's just now okay to eliminate them.

You seem to be saying the same thing

> seem to be saying the same thing

Many companies (mostly tech) increased hiring of all kinds, bullshit or not, during the last years. Those are the excess jobs. Reversing them is the short-term correction. For much longer, corporate America has been staffing up departments which practically do nothing. Eliminating them is the longer-term trend.

Zero interest rate policy means they were the same thing

> Zero interest rate policy means they were the same thing

No, it doesn't, because one of these things pre-dates and was not caused by low rates. (Office Space was released when rates were half a point above where they are now [1].)

[1] https://www.bankrate.com/banking/federal-reserve/history-of-...

Ok what is your evidence that bullshit jobs are being structurally eliminated in a way that is unrelated to interest rate policy?

Their stock is up 13% over the past year. Maybe it's just trendy to lay people off right now?

Wasn't SVB an S&P 500 company?

> … McDonald’s asked them to work from home from Monday through Wednesday so it can deliver staffing decisions virtually, the report said.

That seems kindof scummy: It seems to me that, in general, companies are trying to move away from work-from-home. To use 100% work-from-home, and deliver layoff notices in such a way, strikes me as mean.

But maybe McDonald's corporate is a strong work-from-home company? I admit I haven't researched it.

Don't have to hire security to escort everyone out if they're already home.

Also don't have to worry about somebody going postal at the corporate office.

This is the real reason, they don't want people to coordinate anything, and they don't want employees spiting the company and leaving with valuable info.

I assume they, like many large businesses these days, don't really know where their employees are at any given time. Better that everyone is working from home so they can run some orderly layoff process in a consistent manner.

The pandemic and WFH exposed how little most corporate employees really do and how unnecessary most of them are. I expect a lot of big downsizings will be happening over the next year or two. Why now? It takes a while to turn a big ship.

I am curious at what point concentrated wealth would allow an oligarch to dictate Fed policy through specific company policies. Want the fed to print more money? Lay off a bunch of workers and move a little too much money between banks. Want prices to rise? go on a hiring binge.

Isn't that already happening? And isn't that what caused all this mess in the economy. Every time Fed wanted to end quantitative easing Wall St threw a hissy fit and they didn't dare to do it.

Also, the fed kept saying employment was too high

and wages and wage growth were too high

The markets are certainly too large for any one player to consistently change them. But there is probably a lot of group think going on.

It can be interest alignment. If it's in the vested interest of the independent players, you essentially get orchestrated collusion so long as all players follow their interest.

Most of the stock market is held by passive investors. So it takes comparably less to make a difference. In other words the ‘groupthink ’ isn’t think at all

Post-COVID, it was termed the "K-shaped recovery" where the rich landed windfall profits and the comfortable Beltway journalist class have no concept of how difficult inflation has been for the average 80% of Americans.

The power of concentrated capital goes beyond corporate regulatory capture: lobbyists are the tools of billionaires executing overt corruption. Campaign finance reform couldn't be had by McCain in 1999-2003, so it won't be had now. There is zero possibility of effective or lasting reform from within because the rich run America.

Enter BlackRock. https://theconversation.com/these-three-firms-own-corporate-...

Could this be fallout from losing the chicken sandwich war? Because the Spicy McCrispy was a big disappointment, being not especially spicy nor crispy.

Let us hope that the veterans of this war are treated better than those who survived the Cola Wars. <https://www.theonion.com/ad-industry-veterans-honored-with-c...>

They literally put sauce on a regular one and called it spicy. Terrible.

Ah, the Great Chicken Sandwich War. So many lives lost, so many psyches shattered…I fear we’ll be living with the consequences for generations.

But nah, I doubt it’s any particular product issue. If it’s not just a matter of goosing the share price, it’s probably due to commodity prices eating into profits.

your comment made me order 4 popeyes chicken sandwich

Popeye's still uses trans fats which seems pretty unconscionable given our current understanding of their effect on cardiovascular risk.

https://fastfoodnutrition.org/popeyes/chicken-sandwich https://www.mayoclinic.org/diseases-conditions/high-blood-ch...

I have to imagine it’s mostly driven by the record inflation the last few years

i absolutely loved McD's spicy crispy chicken sandwich. is spicy mccrispy something different? it was quite a bit spicier than i expected (which is why i loved it probably)

I struggle to eat chicken anywhere now due to white striping and woody chicken. Raw chicken breast where the fibers looks like spaghetti is the worst.

I've bitten into fast food chicken sandwiches that I've thrown out immediately.

https://www.sciencedirect.com/science/article/pii/S003257912...

"Spaghetti meat (SM), woody breast (WB), and white striping (WS) are myopathies affecting breast muscle of broiler chickens, and are characterized by a loss of myofibers and an increase in fibrous tissue. The conditions develop in intensive broiler chicken production systems, and cause poor meat process-ability and negative customer perception leading to monetary losses. "

Gotta switch to dark meat, friend

I've switched to chicken thighs for cooking at home. Higher fat content makes for more forgiving cooking.

But chicken breast has/had a great protein/dollar/flexibility profile. Unfortunately, the number of woody chicken breasts that I find now in a pack of chicken is off-putting. Doesn't matter whether it is organic chicken or other brands. I've heard that local farmer's market heritage chickens don't suffer from this - I haven't tried any of those yet.

Yeah obviously the heritage chicken is way more money. I tend to look hard for the smallest breasts at the grocery, the big ones are always the worst.

Smaller is better in general when it comes to food. Asparagus, potatoes, lobsters, lamb, veal etc. More flavor

For years, my goto strategy at Costco has been to buy the smallest package of raw chicken breasts. This strategy has begun to fail me recently - as even smaller breasts are beginning to suffer from issues found in larger chicken breasts.

I've canvassed my local stores including Whole Foods and independent markets that buy chicken from regional suppliers. No one has a source of chicken free of woody breast. It is an industry wide problem having emerged from an ever growing need to supply chicken.

What is woody chicken?

It is really three conditions - spaghetti meat, woody chicken and white striping - all the result of chickens having been bred for rapid growth and size. Taste, texture and flavor are negatively affected.

This site explains them with some pictures: https://www.thepoultrysite.com/articles/woody-breast-myopath...

This is how I identify them:

1. Spaghetti Meat: Raw chicken breast fibers look like spaghetti strands. The top of the breast will look uniform. It is when I've cut into the breast that the spaghetti strands will become apparent. These breasts get boiled and fed to my dog.

2. Woody Breast: This is chicken breast that is tough in texture. Even when cooked, it feels raw or "crunchy". To me, this is really off-putting. I sometimes try to salvage raw breasts by cutting more off (also for my dog). But the taste is so off-putting that I don't care for them.

3. White Striping: You can see this before buying the breast - you'll see white lines across the breast. These breasts can be okay. But often woody breast and white striping coincide. I will cook the breasts if they only have white striping.

So glad you posted this. I’d noticed the weird texture associated with more heavily striped meat when cooking, but had no idea what it was, and wasn’t sure if I was even correct in noticing it.

I’ve sent food in restaurants/fast food places back with that texture because it tasted or feels raw.

Now I know what to avoid at home.

Yeah - the texture is just off. I thought I was undercooking my chicken or that my tastebuds had changed. Lots of discussion of woody chicken on reddit.

This reddit thread references a couple of additional items here:

https://old.reddit.com/r/Cooking/comments/vzuul8/what_are_wo...

https://zootecnicainternational.com/featured/understanding-t...

https://www.intechopen.com/chapters/76893

The crunchy raw asparagus texture is incredibly off putting.

I’m glad you’ve given me some pointers to detect it, and I know it’s not my cooking either.

Next I hope the industry stops making it in the first place.

This turned me vegetarian

This. This comment is the best comment in the world. And this moment is the best moment of my life.

You should try a spicy chicken from McDonald’s in China (麦辣鸡). The spice is cooked in and it isn’t a Tex mex spice that they use in the USA, and more importantly, they use dark meat rather than bland American white meat.

Chicken sandwiches in states are horrible due to our infatuation with chicken breast.

The spicy curry mcchicken I had in Switzerland was also ok.

The referenced "January message" was reported on here: https://www.cnbc.com/2023/01/06/mcdonalds-plans-reorganizati...

Summary: Profits and and growth are good (https://corporate.mcdonalds.com/corpmcd/our-stories/article/...), they plan on speeding up growth, and want to restructure because leadership feels current organization (and "certain initiatives") are holding them back.

This feels cowardly, like breaking up over the phone.

> McDonald’s is closing its U.S. corporate offices as it lays off hundreds of workers.

> hundreds of workers

A chain with 45000 workers or more, and like ~150k worldwide, is shedding a few hundred.

My money says it's DEI, and maybe some project / program / marketing / other soft roles.

Mostly a non-issue, IMO.

..as the stock hits an all time high. I'm not exactly sure what that means but it sure doesn't mean their food is going to taste any better.

https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/stoc...

Interesting. Why now? I knew McDonald's was primarily a real estate company, but are they heavily into office space now?

https://thestrategystory.com/2020/09/24/mcdonalds-real-estat...

A few comments pointed out McDonald's stock price or recent profit, but underneath the hood, their financials aren't great. Since 2010 their long-term debt has grown from about $10 billion to $35 billion. They currently spend about $1.2 billion/year on interest payments, but over time that will increase substantially as their low interest bonds mature.

Here's the recent history of their balance sheet:

https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/bala...

I love how scared all these globomegacorps are of their own workforces; they seem to all love closing their physical locations before layoffs now.

Still think you're a "family?"

The west has fallen. Millions must fry.

'McDonald’s asked them to work from home from Monday through Wednesday so it can deliver staffing decisions virtually'

wow, too weaselly to fire people face to face.

I bet the hamburgler is the culprit

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