Starbucks announced the elimination of 1,100 jobs worldwide as part of its efforts to improve efficiency and streamline its organizational structure.
In a letter sent to its employees, the Seattle-based coffee company revealed that it would be laying off around 7% of their worldwide workforce.
Brian Niccol, the new CEO and chairman of the board, shared this “difficult news” by writing: “We’re simplifying our organization, eliminating layers and duplication, and creating smaller and more agile teams.” We want to be more efficient, increase accountability, decrease complexity, and improve integration. “All with the aim of being more focused, and able drive greater impact on priorities.”
He said that several hundred more unfilled and open positions would be eliminated after the company announced in January that they would be reviewing its role, structure and team size.
Niccol continued: “It was not a decision that the leadership team made lightly. We are aware of the impact this decision has on partner’s lives and families.
We believe this is a necessary shift to position Starbucks to succeed in the future – as well as to deliver to our partners who wear green aprons and their customers.
The company plans to simplify and revamp its menu in March. It will remove some of the less popular drinks, “to make way for innovation”, and reduce waiting times.
Starbucks has been forced to cut jobs after a tough financial year. The company’s same-store sales in global markets dropped by 2% for the year that ends in September 2024. Customers in the US were also frustrated with price increases and longer wait times.
Niccol, who joined the company from the Mexican food chain Chipotle in late last year with the goal of turning it around, has been working to turn the business around since then.
In a letter to employees, he stated that the affected employees will be notified today at noon (25 February) and will also receive information about the compensation, health benefits, and career transition services provided to those who are leaving.
This move does not affect roles like warehouse operations, roasting or in-store baristas.
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