Starbucks mass layoffs: Why is US coffee giant firing 1100 employees? 5 points

Starbucks plans to lay off 1,100 corporate employees globally as new chairman and CEO Brian Niccol streamlines operations. Niccol said Starbucks is also 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.

Starbucks has 16,000 corporate support employees worldwide, but that includes some employees who aren't impacted, like roasting and warehouse staff. Baristas in the company's stores are not included in the layoffs. Starbucks hired Niccol last fall to turn around sluggish sales. 

Niccol said in January that corporate layoffs would be announced by early March. He said all work must be overseen by someone who can make decisions while the Seattle coffee giant reduces the complexity of its structure and eliminates silos within the company that slow communication. 

5 points to know:

1. Starbucks also said that it would be laying off 1,100 corporate employees globally this week — with CEO Brian Niccol citing needs to “operate more efficiently."

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

3. Niccol has said he wants to improve service times — especially during the morning rush — and reestablish stores as community gathering places.

4. Starbucks says these cuts will reduce wait times, improve consistency and make way for innovation.

5. The cuts will affect nearly 7 per cent of the company's 16,000 employees who work outside company-owned stores.

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Starbucks makes cuts to its menu

Niccol is also cutting items from Starbucks' menu and experimenting with its ordering algorithms to better handle its mix of mobile, drive-thru and in-store orders. The Seattle-based company added that simplifying its menu would allow it to focus on fewer, more popular items, executed with excellence. Starbucks' global same-store sales, or sales at locations open at least a year, fell 2% in its 2024 fiscal year, which ended Sept. 29. In the US, customers tired of price increases and growing wait times. 

(With inputs from AP/PTI)