Global coffee house chain Starbucks plans to eliminate 1,100 corporate jobs as part of CEO Brian Niccol’s strategy to streamline the business and improve financial performance.
Niccol has given reassurances that in-store staff are not affected by the cuts and that hiring would continue for roles critical to the company’s revised support structure, as reported by Reuters.
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His approach aims to bolster capabilities where necessary while adhering to a leaner operational model.
In a letter sent to Starbucks employees, Niccol said: “We are simplifying our structure, removing layers and duplication and creating smaller, more nimble teams. Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration.
“We will continue to hire for priority positions that fit with our new support structure and add the capability and capacity we need.”
Starbucks has 211,000 US employees and an international staff count of 150,000. As of the first quarter of fiscal 2025, the company operated 40,576 stores.
Niccol took over as CEO in September 2024 amidst a significant downturn in the coffee chain’s stock value, and has intiated a turnaround plan called “Back to Starbucks”.
The company’s shares have witnessed a notable recovery under his leadership, climbing 22% since he assumed his position.
In the first quarter of fiscal 2025, Starbucks’ global comparable store sales fell 4%, driven by a 6% drop in transactions.
This marks an improvement from the 7% decline in the fourth quarter of fiscal 2024.
In November 2024, the company revealed an 8% reduction in its US retail workforce, which contrasts with the opening of new store locations.
The job cuts are reminiscent of a similar strategy undertaken in 2018 when Starbucks announced the layoff of 350 global corporate employees under former CEO Kevin Johnson’s restructuring plan.
Starbucks is discontinuing several less popular beverage offerings from its menu, 4 March. This includes certain Frappuccino blended beverages, the Royal English Breakfast Latte and the White Hot Chocolate.
Starbucks plans to streamline its offerings in the US by phasing out certain food and drink options.
By the conclusion of fiscal 2025, its menu will have been scaled back by 30%, allowing space for new product development.
Starbucks stated: “We’re simplifying our menu to focus on fewer, more popular items, executed with excellence. This will make way for innovation, help reduce wait times, improve quality and consistency and align with our core identity as a coffee company”.
