Starbucks to lay off 1,100 corporate employees globally as CEO streamlines operations

Starbucks is set to lay off 1,100 corporate employees globally as new Chairman and CEO, Brian Niccol, works to streamline operations.

In a letter to employees released on Monday, Niccol stated that those affected by the layoffs would be informed by mid-day on Tuesday. He also confirmed that several hundred open and unfilled positions would be eliminated.

“Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration,” Niccol wrote in the letter.

Starbucks employs 16,000 corporate support staff worldwide, though this figure includes roles that are not impacted, such as roasting and warehouse staff. Baristas in the company’s stores are not included in the layoffs.

In January, Niccol had mentioned that corporate layoffs would be announced by early March. He noted that all work must be overseen by someone who is empowered to make decisions, as the coffee giant reduces the complexity of its structure and removes silos within the company that hinder communication.

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

Niccol was hired last autumn to turn around sluggish sales. He has stated that improving service times, particularly during the morning rush, and re-establishing Starbucks locations as community hubs are among his top priorities.

In addition, Niccol is cutting items from Starbucks’ menu and experimenting with ordering algorithms to better manage the company’s mix of mobile, drive-thru, and in-store orders.

Starbucks' global same-store sales, or sales at locations open for at least a year, fell by 2% during its 2024 fiscal year, which ended on 29 September. In the U.S., customers have grown frustrated with price hikes and increasing wait times. Meanwhile, in China – Starbucks’ second-largest market – the company is facing mounting competition from cheaper rivals.

However, in its most recent quarter, the company exceeded most sales expectations. Niccol’s changes, such as stopping the extra charge for non-dairy milk and streamlining the menu, have helped boost store traffic and improve service.

Starbucks’ shares rose by less than 2% on Monday.