McDonald’s is removing organizational layers from its U.S. field staff in a bid to improve communication and provide more support to its operators, according to a memo the company published on its website Tuesday morning.
The reorganization, which began with layoffs last week, is part of a $500 million general and administrative savings goal announced in 2015. The company said that its reorganization would cost $80 million to $90 million this quarter, mostly in the form of severance payments and costs associated with closing field offices.
McDonald’s is eliminating its regional structure in favor of its field offices, which will remove “layers” from its field organization that supports franchisees. The company said it would increase resources in areas such as technology and field consulting.
“Collectively, these changes will create a more efficient organization and help owner-operators to succeed,” the company said in its memo. The new field structure will be in place in the third quarter of this year, which runs from July through September.
In the memo, the company said that the new structure would help field employees and the company’s home office work better with owner-operators.
The structure would provide more consulting and support for franchisees and better communication between the field staff and home office.
The company also said that the new structure would align incentives with franchisees. Sources have said that one of the priorities for the company’s field staff will be improving operator cash flow, rather than simply improving their sales.
According to the memo, McDonald’s also hopes the new alignment will improve the chain’s speed to market. The efforts would do this by “managing complexity and improving decision-making.”
McDonald’s has been working to improve the speed with which decisions on new products or offers get to market to better compete with rivals such as Burger King, which has generated strong sales in recent years in part because of its aggressiveness and speed.
The new organization will also help with “career progression” inside the company, McDonald’s said, enabling workers to move up the ladder more quickly.
The reorganization comes after the company unveiled its new downtown Chicago headquarters after more than 40 years in the suburb of Oak Brook, Ill.
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