Starbucks has announced plans to cut 1,100 corporate jobs — or 7% of its non-retail workforce — as part of a broader effort by new CEO Brian Niccol to streamline operations and enhance efficiency that includes removing 13 drinks from its menu.
The layoffs do not affect store employees or those in warehousing, manufacturing, distribution and roasting operations, according to Bloomberg News.
The coffee giant has not disclosed the exact number of corporate employees on its payroll. The majority of its workforce is based in company-operated stores worldwide.
As of September, Starbucks employed 211,000 people in the United States, with 95% working in more than 10,000 company-owned locations.
Internationally, the company had an additional 150,000 employees.
Niccol, who assumed leadership in September amid declining sales, had previously signaled restructuring plans in January.
Employees affected by the layoffs will receive notifications by Tuesday.
In preparation for the transition, corporate staff have been instructed to work remotely for the entire week.
Niccol’s plan to enhance company-wide efficiency also includes streamlining its menu by removing several underperforming drinks, including select Frappuccinos and the royal English breakfast latte. The Seattle-based company plans to institute those changes starting March 4.
Niccol is focusing on enhancing the in-store experience and optimizing offerings, with plans to reduce the menu by 30% by September.
Moving forward, Starbucks will emphasize premium beverages like the cortado while reintroducing popular seasonal items, such as the lavender lineup.
The decision to eliminate corporate positions aligns Starbucks with other major companies making similar cost-cutting moves.
Southwest Airlines, for example, recently announced plans to reduce its corporate workforce by 15% in its first-ever round of layoffs.
Starbucks shares listed on the Nasdaq saw a slight increase of less than 1%.
Over the past 12 months, the stock has climbed nearly 17%, compared to an approximate 18% rise in the S&P 500.
Starbucks has stated that affected employees will continue to receive pay and benefits until May 2, after which they will be eligible for severance based on tenure.
The company is also offering career transition support and other forms of assistance to those impacted.
Additionally, several hundred open and unfilled positions will be closed as part of the restructuring effort.
“I recognize the news is difficult,” Niccol said in the announcement cited by Bloomberg News. “We believe it’s a necessary change to position Starbucks for future success.”
In tandem with the restructuring, Starbucks is implementing new workplace policies.
Vice presidents and higher-ranking executives will now be required to work from the company’s Seattle or Toronto offices three days a week.
However, employees at the director level and below can retain their remote work status, though future hiring will prioritize candidates willing to be based in Seattle or Toronto.
Since taking over as CEO, Niccol has moved quickly to implement operational changes designed to improve store efficiency.
These adjustments include reintroducing condiment bars and restricting access to Starbucks locations to paying customers only.
He has also reversed leadership decisions made by his predecessor and reinforced the company’s return-to-office mandate, warning employees that failure to comply with the in-office requirement could result in termination, according to Bloomberg News.
However, Niccol’s own travel arrangements have drawn criticism from some employees and external observers.
While he has emphasized the importance of in-office presence for employees, he continues to commute from California to the company’s Seattle headquarters using a corporate jet.
Starbucks has defended the arrangement, stating that Niccol will spend most of his time in Seattle or visiting stores as part of his leadership duties.
The Post has sought comment from Starbucks.
