Starbucks is set to lay off 1,100 corporate employees as part of its latest restructuring strategy, according to a letter from its chief executive, Brian Niccol. This decision comes as the renowned coffee chain grapples with lackluster sales and aims to streamline operations.
Brian Niccol, who assumed the role of chief executive last fall, has committed to revitalizing the customer experience at Starbucks. The company has been facing challenges, such as customers avoiding $8 lattes and dealing with long wait times, which have collectively put pressure on sales. In the first quarter of the 2025 fiscal year, which concluded on December 29, Starbucks reported a 4 percent decline in same-store sales globally.
The layoffs are intended to help Starbucks "operate more efficiently" and "reduce complexity," as stated by Mr. Niccol. The cuts will impact nearly 7 percent of the company's 16,000 employees who work outside of company-owned stores, although baristas will not be affected. Starbucks had previously hinted at potential corporate job cuts in January.
"We believe it’s a necessary change to position Starbucks for future success," Mr. Niccol emphasized in his letter. As part of the restructuring, the company will also eliminate several hundred open and unfilled positions. Following the announcement, Starbucks shares rose over 1 percent on Monday morning.
The decision to lay off employees is part of Mr. Niccol's broader strategy to revamp the in-store experience for customers and simplify business operations. He aims to restore the personal coffeehouse atmosphere that Starbucks was originally known for. To achieve this, changes have been proposed for the mobile ordering system to better handle order surges, and certain items have been removed from the Starbucks menu. Additionally, the company announced it will not raise prices for the 2025 fiscal year.
Last month, Mr. Niccol made significant leadership changes within Starbucks' North American market, which accounts for approximately three-quarters of the company's revenue. Mike Grams, previously the president and chief operating officer of Taco Bell, and Meredith Sandland, former CEO of Empower Delivery, a restaurant software company, have been appointed to new roles focusing on store performance, development, and design.
