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02/01/03 . By RICHARD GIBSON, Dow Jones Newswires . Yahoo! News . USA
McDonald's Ends High-Tech Initiative
DES MOINES, Iowa (AP) - McDonald's Corp., in a cost-saving move, Thursday said it has pulled the plug on what had been envisioned as a global digital network linking its fast-food restaurants, headquarters and vendors.
Called "Innovate," the project was killed by the new management team as it focuses on near-term benefits and particularly on restaurant operations, the company said Thursday.
The move is expected to save the company "tens of millions of dollars" this year, a McDonald's spokesman told Dow Jones Newswires. While the financial impact is still being determined, a charge for the project's shutdown is possible, he indicated.
Initial installation of the network was to begin this year in Canada and France. The U.S. portion of its business was scheduled to be linked in about two years.
McDonald's released an internal memorandum, dated Dec. 27, notifying those involved with the high-tech project of the decision to "immediately stop all work on Innovate."
The memo, from vice chairman Jim Skinner, said it was a "tough decision" that had been "dictated by our current business conditions and the need to focus on fewer priorities."
There was no indication of how many people had been assigned to the endeavor. Skinner's memo said some job reductions would result.
Shares of the Oak Brook, Ill.-based company closed Thursday at $16.55, up
47 cents, or 2.9 percent, on the New York Stock Exchange.