Starbucks has announced the elimination of 1,100 corporate and administrative positions as part of a restructuring effort aimed at revitalising its business. The decision was confirmed by Chief Executive Officer Brian Niccol in a message to employees, where he stated that the company is also cutting several hundred unfilled positions.
The move, however, will not impact front-line workers, commonly referred to as "baristas." According to NDTV, the layoffs come amid a decline in sales, with the company reporting a 4 per cent drop in global comparable store sales in its most recent quarter.
Profitability has also taken a hit, prompting Starbucks to reassess its operational structure. The company, which employed 3,61,000 workers as of September 2024 — including 16,000 in corporate and administrative roles — has been facing mounting challenges despite leadership changes.
Niccol, who took charge as CEO in September 2024, outlined the company’s revised approach during a recent earnings call. He pointed to new pilot programmes aimed at enhancing customer experience, including initiatives to speed up service and bring back personal touches, such as handwritten notes from baristas.
Despite the restructuring news, Starbucks' shares saw a 1.6 per cent increase in midday trading. As reported by NDTV, Starbucks is also streamlining its menu by discontinuing select beverages, including some Frappuccino-blended drinks. The decision is based on factors such as popularity, complexity of preparation, and redundancy with existing offerings.
"We are simplifying our structure, removing layers and duplication and creating smaller, more nimble teams," Niccol said in his message to employees. He further emphasised that the goal is to “operate more efficiently, increase accountability, reduce complexity and drive better integration.”
