U.S.-based global coffee chain Starbucks has announced plans to lay off 1,100 employees. The company’s CEO, Brian Niccol, made the announcement, stating that the decision aims to revitalize operations and drive sales growth.
However, Starbucks has been severely impacted by a global boycott triggered by the U.S.’s support for Israel amid its military actions in Gaza. As a result, the company has experienced a decline in quarterly sales.
According to a report by Anadolu Agency on February 24, Niccol stated that Starbucks is simplifying its structure by removing layers and redundancies while forming smaller, more agile teams. Additionally, the company will eliminate several hundred vacant positions that remain unfilled.
Importantly, frontline coffee-serving employees, known as “baristas,” will not be affected by these layoffs. As of September 2024, Starbucks had around 16,000 corporate employees. The restructuring will primarily impact positions in manufacturing, distribution, warehousing, and roasting, but not café workers.
Brian Niccol joined Starbucks as CEO in September 2024 when the company was already facing declining sales. In the latest quarter, Starbucks reported a 4% drop in global same-store sales, leading to a decline in profits.
Niccol emphasized that the goal of this restructuring is to enhance efficiency, improve accountability, reduce complexity, and better integrate operations.
In addition to these workforce reductions, Starbucks is also planning to remove certain items from its menu. Analysts believe that these restructuring efforts, including menu simplification, will make the company’s operations more effective and profitable.
However, the reduction in corporate and administrative staff has raised concerns among employees.