McDonald's Sees Supersized Cuts
McDonald's is closing its US offices temporarily and asking corporate employees to work from home for three days to communicate layoff decisions remotely, canceling in-person meetings at its headquarters.
Good morning. The March jobs report will take center stage this week as a fairly light schedule eases investors into a new month and quarter.
McDonald’s is expected to lay off a number of corporate employees in the coming days, in a big week for the U.S. jobs market. Meanwhile, Southern metropolitan areas are emerging as the country's most vibrant job markets.
McDonald's Shuts Down U.S. Offices Briefly in Preparation for Upcoming Layoffs
According to The Wall Street Journal, McDonald's is shutting down its U.S. offices temporarily this week to inform corporate employees about layoffs as part of a broader company restructuring.
WFH: According to the WSJ, the company sent an internal email last week asking its US and some international employees to work from home on Monday through Wednesday to enable virtual delivery of staffing decisions. The company also requested its employees to cancel all face-to-face meetings with external parties and vendors at its headquarters.
Updated strategy: McDonald's said in January that it would cut corporate jobs and eliminate certain initiatives, while still increasing new store openings. The company said that the job cuts would be completed by April 3. Bloomberg data showed that McDonald's had approximately 150,000 employees as of the end of 2022.
➥ THE TAKEAWAY
Zoom out: Due to the economic slowdown, companies in various sectors, such as retail and manufacturing, are downsizing their workforce. Recently, Walt Disney Co. began eliminating positions, and Walmart Inc., Amazon.com Inc., and Meta Platforms Inc. have also announced additional job cuts. Nonetheless, McDonald's has managed to keep its sales steady, even though lower-income customers are ordering less or choosing cheaper options.
Sunbelt Cities: Nashville and Austin Take Top Spots in Job Market Rankings
If you’re looking to relocate for work, look no further than the South. Nashville, Tenn., has taken the top spot for 2022 in the latest WSJ poll, with Austin, Texas, and Jacksonville, Fla., hot on its heels.
Behind the numbers: The ranking is based on factors such as 2022 wages, active workforces, unemployment rates, employment level changes, and the size of the labor force. Sunbelt cities such as Nashville, Austin, and Jacksonville were favored due to hiring in the services sector and affordability. However, Western job markets like Salt Lake City, Phoenix, and Denver cooled down last year after a surge during the pandemic.
Labor markets: Nashville and Austin ranked highest in labor markets, thanks to their high rates of labor-force participation. Nashville had the third-highest percentage of adults working or looking for jobs, while Austin had the strongest labor-force participation among large metro areas, partly due to its relatively young population.
➥ THE TAKEAWAY
Big picture: The South has a strong job market and is attracting and retaining workers due to lower costs and rapid growth. Many companies are moving their headquarters to cities such as Atlanta, Dallas, Charlotte, Nashville, Austin, and Raleigh. However, these Southern cities are vulnerable to a home-price correction due to big price run-ups, similar to what is happening in Western cities. Despite this, the South remains a top destination for job seekers looking for affordable cities with promising job markets.
📰 Daily Picks
Royal highness: Adam Neumann's residential real estate startup, Flow, is contemplating a launch in Saudi Arabia instead of the US.
Huge discount: Parkway Property Investments have sold the San Felipe Plaza building located in Tanglewood for $82.8M, a far cry from the $156.5M it was originally purchased for in 2005.
“I came from nothing”: During a Congressional hearing last week, Howard Schultz, the ex-CEO of Starbucks, passionately defended billionaires and recounted his childhood spent in federal housing.
Rent control: Despite the growing support for rent control policies nationwide, economists remain skeptical about its effectiveness arguing they would discourage developers from constructing more housing.
Migration patterns: New data from the US Census Bureau shows pre-pandemic population growth rates, the top 10 fastest-growing counties in South/West, and student returns boosted populations in many university counties.
Luxury apartments: Yardi Matrix analysts project over 400,000 luxury homes were completed in 2022 and expect similar levels in 2023, targeting affluent customers.
Throw in the towel: A landmark Uptown-Houston office tower sold for about $83M to Sovereign Partners, much less than its $219M appraised value.
Upgrading space: During an interview with CNBC's 'Squawk on the Street', JLL CEO Christian Ulbrich talks about the increasing strain in the commercial property market and future prospects for the industry.
Hotel occupancy: STR's data until March 25 shows U.S. hotel occupancy declined from the prior week, following the usual pattern of spring break season. Chicago reported the highest YoY increase in occupancy among the Top 25 Markets.
Doom and gloom: As interest rates rise and tens of billions in debt come due, leading to increased delinquencies, Trepp warns that lenders will closely scrutinize borrowers.
⏪ Last Week's Highlights
📈 Chart of the Day
Despite increasing mortgage rates, homebuyers continue to move away from costly cities such as New York and San Francisco, opting for affordable housing and warm weather in Florida.
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