Starbucks has announced plans to lay off 1,100 corporate employees globally as part of a restructuring effort led by new Chairman and CEO Brian Niccol. In a letter to employees released on Monday, Niccol stated that the layoffs would be communicated by mid-day Tuesday. Additionally, the company is eliminating several hundred open and unfilled positions. The aim is to operate more efficiently, increase accountability, reduce complexity, and drive better integration within the organization.
The layoffs affect Starbucks’ 16,000 corporate support employees worldwide, excluding roasting and warehouse staff, as well as baristas in stores. Niccol had previously indicated that corporate layoffs would be announced by early March. He emphasized the need for all work to be overseen by decision-makers as the company simplifies its structure and removes internal silos that hinder communication.
“Our size and structure can slow us down, with too many layers, managers of small teams and roles focused primarily on coordinating work,” Niccol wrote. Starbucks hired Niccol last fall to address sluggish sales. He aims to improve service times, particularly during the morning rush, and reestablish stores as community gathering places. Niccol is also streamlining Starbucks’ menu and experimenting with ordering algorithms to better manage mobile, drive-thru, and in-store orders.
In the 2024 fiscal year, which ended Sept. 29, Starbucks’ global same-store sales fell by 2%. In the U.S., customers were deterred by price increases and longer wait times, while in China, Starbucks faced stiff competition from cheaper rivals. Starbucks shares remained flat in premarket trading on Monday.
— news from The Associated Press