The company announced a 2 percent drop in same-store sales for fiscal year 2024, with price increases and wait times attributed as major factors.
Starbucks is eliminating 1,100 corporate jobs as part of a restructuring effort aimed at streamlining operations and increasing efficiency, CEO Brian Niccol announced on Feb. 24. The layoffs affect global support staff but will not impact in-store employees.
The decision is part of Starbucks’ “Back to Starbucks” plan, which aims to simplify its corporate structure by removing redundant roles and creating smaller, more agile teams. Niccol said the move is designed to “operate more efficiently, increase accountability, reduce complexity, and drive better integration.”
“This includes the hard decision to eliminate 1,100 current support partner roles and several hundred additional open and unfilled positions,” Niccol wrote in a message to global employees.
Starbucks has 16,000 corporate support employees worldwide, but that includes some employees who aren’t affected, such as roasting and warehouse staff.
Despite the corporate layoffs, the coffee chain is maintaining its focus on store operations and frontline employees.
“This does not affect our in-store teams or the investments we are making in store hours,” the company said.
Related Stories
Niccol said in January that corporate layoffs would be announced by early March and that all work would be overseen by someone who can make decisions while the company reduced the complexity of its structure and eliminated silos within the company that slow communication.
Starbucks hired Niccol last fall to turn around sluggish sales. He has said he wants to improve service times and reestablish stores as community gathering places, in part by cutting items from the menu and experimenting with changes to ordering algorithms for mobile, drive-thru, and in-store customers.
The company announced a 2 percent drop in same-store sales for fiscal year 2024, with price increases and wait times attributed as major factors.
Employees affected by the layoffs will be informed by midday on Feb. 25, according to the announcement.
Vice presidents and higher-ranking leaders were expected to begin receiving notifications earlier. Other changes, including shifts in roles and reporting structures, will be communicated by the end of the week, according to the company.
Starbucks is offering severance packages and career-transition services to support those leaving the company.
“I recognize the news is difficult,” he wrote. “It is not a decision the leadership team took lightly. We understand the real effect this has on partners’ lives and their families. We believe it’s a necessary change to position Starbucks for future success—and to ensure we deliver for our green apron partners and the customers they serve.”
In addition, the company announced a shift in office attendance expectations for senior leadership in North America.
Vice presidents and higher-ups will be required to work in the Seattle and Toronto offices at least three days a week. Remote work policies for director-level employees and below remain unchanged.
Niccol expressed appreciation for employees’ contributions as Starbucks undergoes the transition and reiterated the company’s commitment to supporting those affected by the restructuring.
“On behalf of the executive leadership team, thank you. We appreciate all you’ve done for our company, our partners, and our customers, and we’ll do all we can to support you,” he wrote.
Reuters contributed to this report.
