Budget cuts end McDonald's network project

A proposed multimillion-dollar IT project that would have networked some 30,000 McDonald's restaurants around the world, has been...

A proposed multimillion-dollar IT project that would have networked some 30,000 McDonald's restaurants around the world, has been scrapped by the company's new executive team in a cost-saving move.

The fast food company has cancelled its Innovate IT programme, which was proposed in 1999, but had not yet been deployed in any restaurants, said spokeswoman Lisa Howard. "Tens of millions of dollars" will be saved this year by cancelling the project, as the company works to reduce short-term spending, she said.

The move comes after the hamburger chain suffered its first quarterly loss and after a series of management changes that brought a new chief executive officer, president and chief operating officer.

The Innovate project was cut because it was "not going to deliver near-term benefits" as the company tries to improve its financial position, Howard said.

"Our new management team is focusing on the short term," he added. "It's just one example, one step by our new management team. They're looking at everything... and reviewing all aspects of our business."

The Innovate project had been seen as a long-term business-efficiency initiative to integrate all of the company's 30,000 restaurants in 121 countries around the world. But the plan is now viewed as too costly compared with its expected benefits. "We have other ways to achieve [efficiency goals]," Howard said.

In October, McDonald's announced it would restructure its business in four countries and leave markets in three other nations, while closing about 175 under performing restaurants in 10 countries.

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