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McDonald's axes 15 Taiwan outlets and 390 workers

McDonald's Restaurants (Taiwan) Co shut down 15 unprofitable branches across Taiwan yesterday, laying off 390 employees.

"After a six-month evaluation, the company has decided to shut down four stores in Taipei, five stores in Kaohsiung and six in central Taiwan," said Ronnie Liao (廖幸安), the company's communications manager. Some 340 axed staff are part-timers he said.

Liao refused to disclose the company's sales figures, but did say revenues this year are on par with expectations. He attributed the shuttering of restaurants to an array of factors.

"The closures are due to the company's business re-adjustment in the wake of rising store rental prices, relocation of commercial districts and the slower-than-expected economy," Liao said,

He added that there was no problem with the company's operation and management.

McDonald's regional manager in southern Taiwan, Hung Ming-sheng (洪明生), nevertheless, yesterday admitted to reporters that the five Kaohsiung stores have been losing money for more than two years.

He said that the company remains confident in its Kaohsiung business over the long term, but currently, construction of the city's mass rapid transit system has contributed to a slump in business in the area.

Hung further promised to hire back some part-timers during the Lunar New Year holiday in February if a business pickup necessitates rehiring staff.

The abrupt closure decision, however, yesterday came as a surprise to most employees, who learned of the closure the night before but were instructed to show up for a final briefing.

Laid-off staff were given an extra month's pay and proportional year-end bonuses which would normally be paid out at before the Lunar New Year, according to Liao.

The communication manager did not specify whether the company has any expansion plans next year. Nevertheless, he did say, "The company is always looking for new business opportunities."

Before the closure, McDonald's had a total of 362 branches nationwide, including 10 newly opened stores this year. When McDonald's opened its first restaurant in Taiwan in 1984, it broke the all-time, one-day global sales record for the company.

In early November, US-based McDonald's Corp announced plans to close a total of 175 restaurants worldwide, but Taiwan was not included on the closure list.
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