In a sweeping move to simplify its organizational structure and boost efficiency, Starbucks announced plans to lay off 1,100 corporate employees worldwide, as per media reports.
The decision, revealed in a letter to staff on Monday, comes as part of new Chairman and CEO Brian Niccol’s strategy to reduce operational complexity and improve decision-making across the company.
Niccol’s letter stated that affected employees will be notified by mid-day Tuesday. In addition to the layoffs, the company is eliminating several hundred open and unfilled positions. “Our intent is to operate more efficiently, increase accountability, reduce complexity, and drive better integration,” Niccol wrote in the letter, outlining the rationale behind the changes.
The restructuring affects Starbucks’ global corporate support staff, which totals approximately 16,000 employees. However, the layoffs will not impact all positions; roles such as roasting, warehouse operations, and in-store baristas remain unaffected.
Niccol emphasized that each work area must be managed by someone empowered to make decisions, a shift aimed at eliminating too many layers that have slowed communication and coordination within the company.
Hired last fall to reinvigorate the brand amid a period of stagnant sales, Niccol had already signalled his intention to reengineer key aspects of the business.
He plans to improve service times—especially during the morning rush—and refocus store environments as community gathering spots. Additionally, Niccol is overseeing menu adjustments and experimenting with innovative ordering algorithms designed to optimize the mix of mobile, drive-thru, and in-store orders.
The decision follows a challenging fiscal year for the Seattle-based coffee giant.
Global same-store sales declined by 2% in the 2024 fiscal year ending September 29, with U.S. customers expressing frustration over price hikes and longer wait times. In China, Starbucks has faced stiff competition from cheaper alternatives.