Starbucks will reduce its workforce by 1,100 corporate and administrative positions as part of a restructuring effort aimed at boosting sales growth, announced the company’s new CEO. This decision comes in response to a decline in profits and a 4% drop in global comparable store sales in the most recent quarter.
CEO Brian Niccol communicated the decision to employees, stating that the company would eliminate 1,100 current support roles and several hundred additional unfilled positions. However, he clarified that this restructuring would not impact front-line coffee servers, known as “baristas.”
As of September 2024, Starbucks employed 361,000 people, with 16,000 working in administrative and support roles. Niccol, who joined Starbucks in September 2024 during a leadership shake-up, pointed to several pilot programs aimed at revitalizing the company by improving customer service speed and reintroducing personal touches, such as handwritten notes from baristas to customers.
“We are simplifying our structure, removing layers of management, and creating more agile teams,” Niccol said. “Our goal is to operate more efficiently, improve accountability, reduce complexity, and foster better integration across the company.”
In addition to the layoffs, Starbucks will streamline its menu by eliminating underperforming beverages. This includes certain Frappuccino-blended drinks that are either not frequently ordered, difficult to prepare, or redundant with other offerings.
Following the announcement, Starbucks shares saw a 1.6% increase shortly after midday.
