The cuts come after CEO Brian Niccol assumed his post in September, tasked with boosting declining customer demand.
Starbucks plans to lay off 1,100 corporate employees globally as new Chairman and CEO Brian Niccol seeks to boost efficiency.
In a letter to employees released on Monday, Niccol said the company would inform those who are being laid off by midday on Tuesday.
Niccol said Starbucks is also eliminating several hundred open and unfilled positions.
“Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration,” Niccol wrote in the letter.
Baristas not included in layoffs
Starbucks has 16,000 corporate support employees worldwide, but that includes some employees who aren’t impacted, like roasting and warehouse staff. Baristas in the company’s stores are also not included in the layoffs.
Staff made redundant will receive pay for a short-term period, as well as healthcare and career transition services.
Niccol said in January that corporate layoffs would be announced by early March.
He said that all work must be overseen by someone who can make decisions while the Seattle coffee giant reduces the complexity of its structure and eliminates silos within the company that slow 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.
Weak customer demand
Starbucks hired Niccol last year to turn around sluggish sales.
He has said he wants to improve service times, especially during the morning rush, and re-establish stores as community gathering places.
Niccol is also cutting items from Starbucks’ menu and experimenting with its ordering algorithms to better handle its mix of mobile, drive-through and in-store orders.
Starbucks’ global same-store sales, or sales at locations open at least a year, fell 2% in its 2024 fiscal year, which ended on 29 September.
In the US, customers grew tired of price increases and growing waiting times.
In China, its second-largest market, Starbucks faced growing competition from cheaper rivals.
