McDonald's Corp. Chief Executive Steve Easterbrook outlined his
strategy to revive the struggling fast-food chain on Monday,
unveiling plans to save $300 million a year by accelerating
refranchising, restructuring under new segments and cutting down on
bureaucracy.
Shares fell about 1.4% in premarket trading.
Mr. Easterbrook, who took the helm on March 1, has set
expectations high for his turnaround efforts. He repeatedly
describes himself as a change agent dedicated to turning McDonald's
into a "modern, progressive burger company," and says he and his
team "are challenging some of the conventional thinking on multiple
fronts."
Mr. Easterbrook said Monday that his immediate priority is
restoring growth under a new organizational structure.
The company will reorganize under four segments--the U.S.,
international lead markets such as Australia and the U.K.,
high-growth markets like China, and foundation markets--starting
July 1.
"Our new structure will be supported by streamlined teams with
fewer layers and less bureaucracy, and our markets will be better
organized around their growth drivers," Mr. Easterbrook said in a
news release.
In addition, McDonald's now plans to accelerate its pace of
refranchising to 3,500 restaurants by the end of 2018.
In all, the moves are expected to save $300 million a year in
general and administrative costs, most of which will be realized by
the end of 2017.
Mr. Easterbrook had already announced changes prior to Monday's
plan. His plans have included raising wages for McDonald's
restaurant workers, an effort to curb antibiotic use in its
chicken, testing of all-day sales of breakfast items, and the
launch of premium chicken sandwiches and sirloin burgers.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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