Why Starbucks is laying off 1,100 corporate employees
What's the story
Starbucks, the global coffee chain giant, has announced plans to lay off 1,100 of its corporate employees.
The decision comes as part of a broader strategy by new Chairman and CEO Brian Niccol to streamline operations.
In a letter shared with employees today, Niccol said that those affected by the layoffs would be notified by mid-day tomorrow.
Job cuts
Starbucks to eliminate several hundred open positions
Along with the layoffs, Starbucks is also planning to cut several hundred open and unfilled positions. This is part of the company's larger strategy to streamline its operations.
"Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration," Niccol wrote in his letter to employees.
Exclusions
Layoffs won't affect baristas or warehouse staff
Notably, the layoffs won't affect all of Starbucks's 16,000 corporate support employees globally.
Roasting and warehouse staff as well as baristas in the firm's stores are not included in these job cuts.
Niccol had earlier said in January that corporate layoffs would be announced by early March, as part of an effort to reduce the complexity of its structure and eliminate silos within the company that slow communication.
Revival plan
Niccol's strategy to boost Starbucks's performance
Niccol was hired by Starbucks last year with the intention of reviving its sluggish sales.
His strategies involve improving service times, especially during the morning rush, and reestablishing stores as community gathering places.
He is also experimenting with ordering algorithms to better manage a mix of mobile, drive-thru and in-store orders while trimming items from Starbucks's menu.
Sales slump
Sales decline and market challenges
Starbucks's global same-store sales, a metric of sales at stores open for at least a year, fell by 2% in its 2024 fiscal year ending September 29.
In the US, customers have been increasingly tired of price hikes and longer wait times.
Meanwhile, in China, Starbucks's second-largest market, the company is facing tough competition from cheaper rivals.