McDonald's and Mental Health

McDonald’s made news in the last week of March 2023 when it sent an email to workers at multiple corporate offices in America instructing them to work from home April 3 through April 5 as it executed a plan to distribute layoff notifications as part of a major reorganization of the company. News of a major corporation performing layoffs is not “news” per se in the current economic climate, though it was a surprise to McDonald’s workers since the firm is actually doing better than most restaurants as higher prices drive diners down the proverbial food ladder at the expense of more upscale casual restaurants.

The McDonald’s layoff is newsworthy not due to the timing or the numbers but due to the stay at home aspect of the plan. For decades, employees working in jobs which create unique physical or network security risks have grown accustomed to layoff processes more akin to scenes from Goodfellas. It has been rare for such employees to be let go (whether due to layoffs or just cause) with advanced notice. Such workers are normally invited to a conference room with their supervisor and an HR representative. When that meeting begins, people in desktop support confiscate their laptop from their office and people in IT disable their network logins and VPN access. When the meeting ends, the now-ex-employee has nothing to do but return to their cubicle or office, retrieve their personal effects under the watchful eye of HR and walk out of the building.

This process ensures the employee cannot get back into critical systems AFTER being notified of termination to destroy data, steal data, harm networks or initiate actions that can damage physical infrastructure. This process seems a bit cold and heartless and it is in a very real sense. The only thing worse than seeing a colleague get laid off and “perp walked” out of the building with their box of stuff is BEING the employee getting perp walked out in front of your colleagues like you did something wrong when in many cases, MANAGEMENT failed for years to do its job in adjusting to market forces to pump the breaks on hiring to avoid needing a mass layoff in the first place. Brutal as it is, those working such sensitive positions understand why those positions require those types of measures. It is required to protect the integrity of data and services for millions of customers and the public at large.

This process was altered significantly as a consequence of work from home arrangements whereby employees frequently or exclusively worked from home and might not be in a corporate office for that fateful final meeting with HR and their boss to get their layoff packet, COBRA forms, unemployment forms, etc. Many companies took to “remote layoffs” using web conferencing, much like the movie Up In the Air where Ryan Bingham (George Clooney) is a layoff expert racking up frequent flier miles traveling across the country for one on one layoff discussions only to be grounded back at corporate after a college hire suggests using video conferencing to make the process more, um… efficient. Only in the last six months have the socially dysfunctional, conflict-averse introverts running firms like Twitter, Facebook and Google perfected the remote layoff to a completely non-visual, non-verbal bloodless process whereby people learn they lost their job via an email. Or worse, people find they lose their job by having their email and VPN access terminated and waiting for paperwork to be mailed to their home.

The reporting on McDonald’s plan doesn’t reflect the number of employees that will be affected, the severance packages that will be offered or the exact means of communication. However, the directive given to ALL employees at most (all?) of the corporate locations is to work from home and do NOT come into the office… For three days. Basically, employees have been told to stay home and wait for an email or call.

I’m sure technology has advanced mightily in the innovative, highly competitive cutthroat world of fast food but why would McDonalds conclude that EVERY ONE of the employees being laid off merits the “top security / business critical employee” treatment? Do they all have login access to McDonald’s data center servers? Do they all have access to company financials? Have they all seen the branding strategy for the return of McRib?

Clearly not.

So why is McDonald’s executing this layoff with such a seemingly inappropriate, draconian vibe? McDonald’s reverted to partial work from home in July of 2021, allowing two days of remote work per week. Are most employees conforming to that rule or is it still an “aspirational goal” for HR? Maybe the rollout plan was chosen because enough employees are still remote on any given day that it was easier to devise a single written communication plan assuming a single communication medium and they opted for the lowest common denominator knowing some would inevitably get the news remotely. HR leaders and lawyers both are loathe to have mass layoff information disseminated by varied processes that can convey inconsistent information leading to charges of discrimination.

Does this modus operandi say something else about Corporate America? Have the FANGs of the world and the unique leadership styles of their executives succeeded at lowering expectations for these types of human interactions for all companies in all industries?

Does this modus operandi say something about attitudes regarding the workplace and work itself on the part of workers? Not just “labor” at the bottom of the ladder – everyone works for someone and these dynamics don’t skip levels. Have workers internalized the lessons of watching generations of their parents and grandparents get unceremoniously jettisoned from a job and assumed as managers that everyone already expects this? Is that leading managers to just shrug and say why bother agonizing over smoothing the message? Why suffer through dozens of awkward one-on-one conversations? I’m still here, sucks to be you, see ya on LinkedIn?

Or does it say something about the collective mental health of America today and particularly the risks associated with the mental health of an America awash with guns? McDonald’s plan also applied to its overseas corporate employees so the logical leap cannot be made that the order only involved the US, thus reflecting some unique American market fear. On the other hand, the desire of HR and legal types for consistent messaging may have driven the inclusion of overseas workers in the work from home directive. McDonald’s employees about 150,000 workers in its corporate offices (not counting corporate owned restaurants and franchise owned restaurants), the vast majority in America. Even a five percent reduction would be 7500 layoffs. No employer would probably ever publicly confirm they actively considered the threat of workplace violence when executing these plans but it seems HIGHLY unlikely such concerns would NOT be considered. Is this policy indirectly divulging the macabre calculus employers are going through for such events to determine how many could be laid off before hitting some threshold where a violent incident becomes too likely?

I suspect there is some truth in all of these dynamics. I also suspect that younger workers may not consciously think through these events and formally describe the dynamics involved but they are certainly seeing them and factoring them into their own decisions, both in the little picture each day when deciding how much mental energy to devote to the man and in the big picture as they decide what types of jobs to take and how long to stick around before moving on. It won’t get any easier to boost productivity when the overarching vibe in the work place is so fearful, resentful and me-versus-we centric.

WTH

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To generalize this discussion let’s introduce the PMI data

The ISM Manufacturing PMI decreased to 46.3 in March of 2023, the lowest since May of 2020, and compared to 47.7 in February and a consensus of 47.5 implying that rising interest rates and growing recession fears are starting to weigh on businesses. The reading pointed to a fifth straight month of contraction in factory activity, as companies continue to slow outputs to better match demand for the first half of 2023 and prepare for growth in the late summer/early fall period. New orders (44.3 vs 47), employment (46.9 vs 49.1) and backlogs of orders (43.9 vs 45.1) shrank faster. Also, production continued to decline (47.8 vs 47.3), inventories moved to contraction territory (47.5 vs 50.1), and supplier deliveries were the lowest since March 2009 (44.8 s 45.2). At the same time, price pressure eased further (49.2 s 51.3)

Side NOTE I have a small partnership that I had a worry about. One of the gentlemen might get another offer and we would not complete our project. That was my worry. Instead the football moves forward in my mind to a better day when doing our project suits us well before any economic recovery. The partner in his day job is less likely to move on into other endeavors right now. Our CEO is uncanny…or incredibly lucky…

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Reportedly McDonal’s ice cream machine repairman was laid off a few years ago.

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I think you might infer that MCD is finding some resistance is passing through cost increases to customers. Cost cutting is needed to close the gap.

Customers are trimming expenses to deal with inflation. That maybe means fewer trips to McDonalds and maybe a switch to value items from the premium sandwiches.

McDonald’s seems to anticipate a recession and slowing sales.

Or, maybe Mickey D’s is following the Welch playbook, after already running the company into negative equity to juice the stock, maybe they figure they can get the same amount of work out of fewer people, if they just beat on them harder.

Steve

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Steve, if nothing else, you are consistent: consistent in insisting/implying that every business is out to screw their workers.

I wonder how the USA ever got to be the number one economy in the world?

Rhetorical question, Steve since we all know that even though capitalism and our form of government is not perfect, they are still the best on this planet.

Cheers!
Murph

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Not just workers, customers and anything else that is screwable. LOL

If only people would understand that business is not about creating jobs. For business jobs are a necessary evil while a benefit for people looking for income. This is an economics board and it should be Econ. 101.

The Captain

Let the outrage flow…

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Wow. Glad to be a necessary evil for my employer. Thankfully my mgmt doesn’t see me that way. This is what happens when some people think it’s all about the money and anything else is, well, just a necessary evil. And you wonder why capitalism is getting a bad name these days.

And yet that doesn’t mean that both might not be broken and might need improving.

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I remember the 1:1’s and perp walks from my early career days. Things changed slowly over time. I quit Oracle in Feb 2017 while working on SPARC processors. The signals started in late November 2016 with the layoff of about 93 people. Very targeted, basically an entire org that was related to my org was just axed. Then they hit some California people related to the operating system. Next our project was trimmed from 3 variants to just 1, and some people let go. Each time, just enough people to be under the trigger a WARN act. Reading the tea leaves I started looking. I was about the 5th to go from my site. The ax fell about 4 months later and the people were informed by pre-recorded video message in a conference room. The joke was “we were RIF’d by RoboCall”.

At Arm is was just strange. When the Nvidia acquisition fell through almost immediately the new CEO announced “in one month we are laying off 15% of the company”. Wow, talk about signaling! Needless to say head hunters started calling people. I survived but still kept looking and interviewing and then… drumroll, went Nvidia after all. What was more interesting was how layoffs in the UK are handled. Several people will get impacted, meaning they are at risk. Maybe there are 5 people but only 3 open positions now, and we know the 5 people at-risk but not who will eventually go, for up to a month or more. Very strange. Almost like “RIF Survivor Island”.

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Where I come from “not perfect” means there is room for improvement.

Cheers!
Murph

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Based on my over 30 years in the private sector. Five different employers. Two were NYSE listed companies with tens of thousands of employees. Three were closely held companies with 200-300 employees. Of that population, the last one really wasn’t bad. The rest were a constant process of being beat on and cheated.

If “JCs” were the wonderful people they are universally made out to be, there would not be any labor unions.

Steve

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Ask your employer’s accountant where he enters your pay, Revenue or Cost? :wink:

If you produce more than what you cost then you are a net asset. Imagine you could be replaced by a humanoid robot… Lots of workers will.

The Captain

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And we both know that the real answer lies somewhere in between: there are good employers and bad ones. Also, one’s definition of “good/bad” can vary greatly. My definition of “good” is heavy on fairness, not slanted toward the worker: fair day’s work for a fair’s day pay.

I spent almost 30 years working for others in 9 different states, and then had my own business. Found good and bad… just like everything else in life.

When ever I encountered excess negativism in someone who reported to me, (i.e. folks who focused almost exclusively on “cursing the darkness”), I made a rule: one is not allowed to curse the darkness unless one also “lights some candles” ( propose some reasonable solutions).

That approach worked well throughout by career (indeed, some really great ideas came from some who seemed to be most negative), except for those who could only complain without trying to solve the problems they cursed.
Only one solution for those types of people: suggesting they find employment elsewhere.

Cheers!
Murph

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Murph,

Demand side economics.

We got $31 trillion in debt with supply side economics.

Glad you asked. But you knew that.