Starbucks announced on Friday that it will undergo an unspecified number of layoffs as part of a restructuring process aimed at its corporate workforce.
In a correspondence directed at employees, Starbucks’ Chairman and CEO Brian Niccol emphasized the necessity for every task to have a designated owner responsible for decision-making. He noted that the company must also simplify its operations and eliminate unnecessary divisions within the organization.
According to Niccol, the current size and organizational structure of Starbucks can hinder efficiency, citing the existence of numerous management layers, small team managers, and roles that primarily focus on coordination of tasks.
Importantly, these layoffs will not affect the baristas working in Starbucks’ stores. Niccol indicated that the affected individuals will be informed by early March.
“I do not take these decisions lightly, and I appreciate that this will create uncertainty and concern between now and then,” Niccol expressed. He aimed to keep communication open regarding their progress and plans, ensuring that employees receive updates directly from him.
Starbucks employs roughly 16,000 corporate staff globally, with about 10,000 located in the United States and the remaining 6,000 working in other countries. The total number of employees across all divisions of the company is around 361,000, as stated in its annual report submitted in September.
The coffee chain has experienced disappointing sales in the past year, as U.S. customers are reducing their expenditure, while in China, patrons have shown a preference for lower-priced alternatives.
In an effort to revitalize the brand and improve sales, Starbucks appointed Niccol in September. He brings a wealth of marketing experience from his previous leadership roles at Taco Bell and Chipotle, tasked with steering the company back on track.
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