Starbucks has announced a significant reduction in its corporate workforce, with plans to lay off 1,100 employees worldwide in an effort to streamline operations under the leadership of the new Chairman and CEO, Brian Niccol.
In a communication to staff on Monday, Niccol outlined that the affected employees would be notified of their job status by Tuesday afternoon. Additionally, Starbucks is set to eliminate several hundred vacant positions that remain unfilled.
“Our goal is to enhance efficiency, increase accountability, and foster better integration,” Niccol stated in the letter.
While the company’s corporate support includes 16,000 employees globally, the layoff impacts primarily select corporate roles, exempting roasting and warehouse staff. Starbucks store workers, which constitute the bulk of the company’s 361,000-strong global workforce, are not part of these layoffs.
In January, Niccol hinted that job cuts were imminent, with an emphasis on reducing operational complexity and ensuring management structures allow for decisive leadership.
“Our existing size and structure impede agility, with layers of management and roles that predominantly coordinate tasks,” Niccol explained.
Starbucks’ announcement follows similar moves by several large corporations. Recently, Southwest Airlines revealed its decision to cut 1,750 jobs, equating to 15% of its corporate workforce — marking a significant development in its long history. Meanwhile, Bridgestone Americas recently shut down a manufacturing plant in LaVergne, Tennessee, resulting in 700 job losses.
Niccol was brought in last fall to revitalize Starbucks amidst declining sales. His strategic focus includes optimizing service speed, particularly during the high-demand morning hours, and revitalizing stores as welcoming community hubs.
Changes under Niccol’s leadership include menu simplifications and adjusted ordering systems to accommodate the blend of mobile, drive-thru, and in-store transactions.
In its fiscal year ending September 29, 2024, Starbucks encountered a 2% decline in global same-store sales, impacted by customer fatigue over price hikes and increased wait times in the U.S. and heightened competition in the Chinese market.
Notably, in the most recent quarter, Starbucks exceeded sales expectations thanks to visible modifications, like the removal of extra charges for non-dairy milk.
On Monday, Starbucks’ stock saw a modest uptick, rising just under 2%.
