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Wednesday, 17 October, 2001, 19:25 GMT 20:25 UK
McDonald's launches shake-up
A McDonald's restaurant
Customers have complained of declining service
McDonald's has launched a shake-up of its US operations, in the hope of checking a nine-month-long slide in profits.

The fast-food giant is rationalising its regional operations and reining in its franchise base, with the aim of centralising corporate control and tightening focus on customer service.

The process will result in the loss of up to 700 jobs, mainly at the firm's Oak Brook, Illinois, head office.

McDonald's has reported three straight quarters of falling profits, as consumers have been spooked by food-safety fears, especially in Europe.

The company's image has also suffered at the hands of the anti-globalisation movement, and it has been hit in the US by allegations of declining service quality.

Back to the centre

The restructuring aims at gathering more influence at head office, reversing the decentralisation seen over the past few years.

The company said it would streamline its US regions to 21 from 37, and appoint five new managers to provide tighter control of franchisees - a key area of quality slippage.

In addition, it will be reducing the number of its divisions from five to three.

The moves will not boost profitability immediately: the firm admitted that it will take a fourth-quarter charge on its accounts as a result of restructuring costs.

McDonald's, for many years one of the fastest-growing large companies in the world, was recently forced to start closing restaurants in its international operations.

See also:

24 Jul 01 | Business
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Japanese ambitions for McDonald's
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Square fruit stuns Japanese shoppers
04 May 01 | South Asia
No beef in McDonald's fries
07 Nov 00 | Business
The limits of globalisation
14 Jan 00 | Asia-Pacific
Toy riot in Singapore burger joint
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