Starbucks Shocks Industry with Layoffs of 1,100 Corporate Employees Amidst Restructuring

Starbucks announced plans to lay off 1,100 corporate employees globally as part of a restructuring effort led by new Chairman and CEO Brian Niccol. The layoffs will be communicated to affected employees by mid-day Tuesday, with additional reductions in several hundred open positions also planned.

Starbucks has approximately 16,000 corporate support employees worldwide, but the layoffs will not impact baristas or warehouse staff. Niccol emphasized the need to reduce complexity and improve accountability within the organization. He stated that the current structure has too many layers, which can slow decision-making and hinder communication.

In January, Niccol indicated that corporate layoffs would be announced by early March. The company’s global same-store sales fell by 2% in its 2024 fiscal year, attributed to customer dissatisfaction with price increases and longer wait times. Additionally, Starbucks faces stiff competition in China from cheaper rivals.

• 1,100 corporate employees to be laid off.
• Several hundred open positions will also be eliminated.
• Starbucks aims to improve service times and streamline operations.

Despite the layoffs, Starbucks recently exceeded sales expectations in its most recent quarter. Changes made under Niccol’s leadership, such as eliminating extra charges for non-dairy milk and simplifying the menu, have positively impacted store traffic and service efficiency. The company’s shares rose less than 2% following the announcement.

The layoffs at Starbucks reflect ongoing efforts to enhance operational efficiency and address declining sales. As the company navigates these changes, it will focus on improving customer experience and adapting to competitive pressures in both the U.S. and international markets.