The fast-food company is closing its offices “out of respect,” and to “provide dignity, confidentiality, and comfort to our colleagues,” said the source, who was not authorized to speak to the media.

“It used to be that folks would be called into a conference room with the windows papered over and then have to walk back to their desk to collect their personal belongings and leave with their head down,” the source said.

McDonald’s will have more employees going into new roles this week or receiving promotions then being laid off, the source added. The chain has more than 150,000 employees globally, with about 70 per cent based outside of the U.S., including in company-owned restaurants.

The layoffs do not include the more than two million worker in franchised McDonald’s restaurants around the world.

Chicago-based McDonald’s did not immediately return a request for comment.

McDonald’s said in January that it would review corporate staffing levels as part of an updated business strategy, which could lead to layoffs in some areas and expansion in others.

As part of updating its strategy, McDonald’s also plans to build new restaurants. It has hiked prices on its menu over the last year as commodity and labour costs have soared.

— Reporting for Reuters by Jessica DiNapoli and Hilary Russ in New York.

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U.S.-listed shares of the company rose more than three per cent after it topped results estimates for the fourth quarter ended Dec. 31, led by soaring online sales and better-than-expected same-store sales growth at Burger King in the U.S. and Tim Hortons in Canada.

Restaurant chains are raising prices because they are paying higher costs for shipping, labour and commodities including chicken, coffee and cooking oils amid COVID-19 related disruptions.

The record inflation levels and staffing disruptions due to the omicron variant dulled profits at McDonald’s and Starbucks.

Burger King’s Whopper — made from a quarter-pound of grilled beef — is an “iconic” product that has “been on this core discount platform for too long,” Restaurant Brands CEO Jose Cil told Reuters in an interview.

The chain, which often caters to lower-income customers, removed the item from its two for $5 deal but could offer limited discounts on the burger in the future (all figures US$).

Burger King also said it would stop selling some less-popular menu items altogether, including sundaes, whipped toppings and chocolate milk.

Cil declined to provide timelines for overall price hikes in 2022.

Toronto-based Restaurant Brands reported total revenue of $1.55 billion, above estimates of $1.52 billion.

But U.S. comparable sales fell at Popeyes, in part because some locations have had to reduce operations by an average of one hour due to staffing shortages.

Popeyes’ sales had been soaring even through much of the pandemic after the 2019 launch of its fried chicken sandwich, which was so popular that most rivals — including McDonald’s and KFC — introduced their own similar product.

Restaurant Brands reported per share earnings of 74 cents in the fourth quarter, topping Refinitiv estimates of 69 cents.

— Reporting for Reuters by Deborah Sophia in Bangalore and Hilary Russ in New York.

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The companies began testing the “McPlant” patty in eight McDonald’s U.S. locations in November. Those restaurants have been selling enough of the sandwiches — as many as 70 per day — to warrant an expansion of the trial, the analysts said.

McDonald’s said when it announced the tests that customers would have to wait for more updates. The company declined to provide new details to Reuters on Tuesday. Beyond did not reply to a request for comment.

Any move by McDonald’s to sell a plant-based burger widely across its more than 13,500 U.S. locations could be a boon to plant-based meat makers generally and Beyond specifically.

Rivals have been vying for partnerships with restaurant chains as they add vegan and vegetarian menu options. Beyond is working with Taco Bell owner Yum Brands, while Impossible Foods partnered with Burger King, a unit of Restaurant Brands International. In the Canadian market, Beyond partnered with McDonald’s to test a plant-based “P.L.T.” burger at some of its restaurants in Ontario last year.

BTIG analyst Peter Saleh said in a research note on Monday that he expects the product to be in about 700 restaurants across several regions as a limited-time offer in February and March, with a national rollout possible in 2023.

Unlike the current test, the expansion would come with local and regional advertising funded by McDonald’s franchisees and possibly Beyond, Saleh said.

Separately, Piper Sandler analyst Michael Lavery said in a note that McDonald’s could launch McPlant burgers nationwide late in the first quarter of 2022, earlier than previously anticipated.

That could pressure margins for Beyond. While it will sell more patties, it may do so at a lower price — closer to $4 per pound than the $5.25 Lavery initially forecast — as it seeks to undercut the price of animal protein by 2024, he said.

— Reporting for Reuters by Hilary Russ in New York.

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Over the past year, with the rise of companies including Beyond Meat and Impossible Foods, “plant-based” has become a food industry buzzword and several major brands and restaurants have raced to offer such products. The plant-based meat substitute category is expected to be worth $140 billion in the next decade, according to Barclays (all figures US$).

Starbucks — which sells sausage breakfast-sandwiches, chicken wraps and smoked salmon bagels with cream cheese — did not say by when it would start offering plant-based items. A spokeswoman told Reuters the company is exploring meat alternatives for its breakfast menu, but declined comment on potential suppliers.

Shares in Beyond Meat, which makes pea-based sausages, chicken and burgers, rose as much 17.1 per cent to $127.80.

Starbucks also said it aims to eventually shift to reusable packaging from single-use cups and plastic, and invest in better waste management.

For now, the world’s largest coffee chain has laid out targets for 2030 including halving landfill waste from stores, and carbon emissions from its direct operations and supply chain. The targets were informed by research from the World Wildlife Fund and sustainability consultant Quantis, Starbucks said.

Starbucks, which uses about six billion cups a year at its more than 30,000 outlets, has failed in the past to meet some of its own environmental goals including making 25 per cent of its cups reusable by 2015. The target was revised to serving five per cent of its beverages in personal tumblers by 2015, which Starbucks also missed.

The Seattle-based company’s abundant use of containers, lids and straws has been criticized by consumers as well as activist groups for decades. To be sure, some of its goals have been met, such as a 2008 plan to buy enough renewable energy certificates to power all of its company-operated stores by 2015.

— Reporting for Reuters by Richa Naidu and Hilary Russ.

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