Starbucks Announces ‘Necessary’ Major Change to Streamline Operations

After warning employees in January that corporate layoffs were on the way, Starbucks CEO  Brian Niccolhas announced the elimination of 1,100 jobs globally.

"Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration," Niccol wrote in a memo to employees on Monday, Jan. 24.

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"Our size and structure can slow us down, with too many layers, managers of small teams and roles focused primarily on coordinating work," Niccol explained.

"I recognize the news is difficult," the CEO continued.

"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."

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While Starbucks has 16,000 corporate employees worldwide, not all will be impacted (such as roasting and warehouse staff), according to the AP . Baristas are also not being targeted in the layoffs, though several hundred open and unfilled positions will be eliminated. The coffee chain will notify employees who are being laid off by the mid-day Tuesday.

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Niccol, who was hired last fall as part of the chain's attempts to turn around slow sales, has said that he wants to improve service times, particularly during the morning. Starbucks' global same-store sales fell 2% in its 2024 fiscal year. 

The layoffs are just the latest change heralded by Niccol, who announced forthcoming menu cuts during an earnings call on Tuesday, Jan. 28, promising a "roughly 30% reduction in both beverages and food." 

"While we're only one quarter into our turnaround, we're moving quickly to act on the 'Back to Starbucks' efforts and we've seen a positive response," Niccol said in a press release . "We believe this is the fundamental change in strategy needed to solve our underlying issues, restore confidence in our brand and return the business to sustainable, long-term growth" he added. 

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