Starbucks (NASDAQ: SBUX), the global coffee giant, has announced plans to lay off 1,100 corporate employees as part of a broader effort to streamline its operations and address declining sales. This move, spearheaded by CEO Brian Niccol, aims to simplify the company’s structure and enhance efficiency without impacting baristas or other store-level staff.
Niccol, who joined Starbucks last fall, has been tasked with turning around the company’s sluggish sales performance. Starbucks has faced significant challenges, including four consecutive quarters of declining same-store sales. The company’s struggles are particularly pronounced in its two largest markets: the U.S., where customers have been deterred by price increases and long wait times, and China, where cheaper competitors have gained traction.
The layoffs are part of a strategic restructuring aimed at reducing complexity and increasing accountability within the organization. Niccol emphasized the need to eliminate unnecessary layers and duplication, creating smaller, more agile teams capable of driving greater impact on key priorities. This approach aligns with Niccol’s broader strategy to improve service times, especially during peak hours, and reestablish Starbucks stores as vibrant community hubs.
Starbucks employs approximately 16,000 corporate staff globally, with about 10,000 based in the U.S. and 6,000 in other countries. The layoffs will primarily affect corporate support roles, excluding essential functions like roasting, manufacturing, warehousing, and distribution.
The restructuring comes as Starbucks seeks to regain its footing in a competitive market. Niccol has also been experimenting with menu adjustments and optimizing ordering algorithms to better manage the mix of mobile, drive-thru, and in-store orders. These efforts reflect a broader strategy to enhance customer experience and adapt to evolving consumer preferences.
While the layoffs may create uncertainty for affected employees, Niccol has emphasized transparency and the importance of these changes in positioning Starbucks for future success. As the company navigates these challenges, its ability to adapt and streamline operations will be crucial in revitalizing its brand and driving growth in a rapidly changing retail landscape.
