According to Wall Street Journal, McDonald’s temporarily shut its corporate offices in the U.S. as the fast-food giant prepares to send out layoff notices. This is before it supposedly plans to eliminate hundreds of corporate jobs as it restructures operations to streamline decision-making and accelerate growth. This is expected as the company faced a decline in sales and profits during the pandemic, and the restructuring is part of its recovery efforts.

Having joined IBM in 1995, I vividly recall the reactions of existing employees following a significant restructuring in the early 90s. As the new recruit, I could sense an unease among the staff, and it was evident that the culture had shifted due to the restructuring. Fast forward to 2009, when I was laid off, and I witnessed the remaining employees’ reactions. Clearly, the culture had shifted again, and the organization had become different. The impact of restructuring and layoffs on a company’s culture must be considered, as it can have long-lasting effects on the employees’ morale, productivity, and performance.

The decline in demand for McDonald’s food is partly due to concerns over its perceived healthiness and inflation. Shutting down offices and canceling meetings can significantly disrupt organizational effectiveness and productivity, with employees working from home feeling uncertain about their employment. This can lead to decreased productivity among those not laid off, and McDonald’s may lose some talented employees after the restructuring settles down.

Are these effects factored in when restructuring decisions are made? To avoid further setbacks, the company must balance cost-cutting measures and top talent retention.