McDonald’s risks employee ire by joining trend of virtual layoffs

A sign is posted in front of a McDonald’s restaurant on in San Pablo, California. The fast food chain restaurant is shuttering its US offices this week as the company prepares to restructure and inform employees about layoffs. — AFP

McDonald’s Corp is the latest company asking staff to work from home during layoffs, a practice that has sparked criticism from other companies’ employees and management experts.

The fast-food chain told corporate staff to work remotely Monday through Wednesday to provide confidentiality while it cuts hundreds of jobs, according to a person familiar with the company’s plans. The decision was made out of respect for those affected, said the person, who asked not to be identified discussing private information.

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McDonald’s is talking with all of its corporate employees this week, not just those being let go, and the Chicago-based company is moving more people into new or higher roles than it’s separating, the person said.

Twitter Inc also closed its offices before conducting mass layoffs under new chief executive officer Elon Musk in November. And PepsiCo Inc took a similar approach in December, according to a report by Fox Business.

Virtual layoffs had become standard practice during pandemic lockdowns out of necessity as businesses faced a sudden and immediate need to downsize. But now that many companies have returned to offices, executives can choose: Should layoffs be done in person or remotely?

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Delivering pink slips virtually can lead to fierce backlash. Better Holdco Inc, an online mortgage lender that fired 900 workers over Zoom, was forced to apologise publicly after the incident went viral on social media. Workers at Alphabet Inc’s Google have criticised the company’s recent mass layoffs and called for, among other things, future job cuts to be conducted in person so that employees can say goodbye to colleagues.

Even though remote layoffs can be more efficient and less awkward for everyone involved, some experts say the norm should still be to break the news in person whenever possible.

In the past when a company had a large-scale layoff, such as a plant closure, the bosses would gather everyone together and tell them at the same time, said Sandra Sucher, a professor of management practice at Harvard Business School who studies trust between employers and employees. Then employees would meet with managers one-on-one to process the news and have the opportunity to ask questions.

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While some companies may see conducting a mass layoff virtually as more efficient than going through a process like this, Sucher says it’s “kind of a false efficiency.” While the initial news can be delivered quickly, there are countless follow-up questions – about timing, severance packages, logistics and health-care benefits. “There are some processes you don’t want to do fast,” she said.

“These have always been – and I’ve had to do this myself – very personal and difficult conversations,” Sucher said. “But that’s a human respect that we show to take accountability for the fact that we’ve just involuntarily separated someone from their job – and now they can’t support themselves, their families. That’s the most consequential act a company can do.”

Ultimately, Sucher said, “the privacy argument has a certain merit, but I don’t think it’s outweighed by the need to be face to face with someone.” – Bloomberg

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