Starbucks struggles to make a comeback
Starbucks is undergoing a significant restructuring, announcing the layoff of 1,100 corporate employees and the decision to leave several hundred open positions unfilled.1 CEO Brian Niccol delivered the news to corporate staff on Monday, emphasizing the company’s need to adapt to changing market conditions.
Crucially, these cuts will not impact the baristas and staff working in Starbucks cafes.2 The focus is squarely on the company’s corporate structure.3
In his message, Niccol explained that the restructuring aims to “simplify our structure, removing layers and duplication and creating smaller, more nimble teams.” He outlined the goals as operating more efficiently, increasing accountability, reducing complexity, and driving better integration.4 Ultimately, the company aims to be “more focused and able to drive greater impact on our priorities.”5
This move comes at a pivotal time for Starbucks. The company has faced four consecutive quarters of declining same-store sales, a clear indicator of shifting consumer preferences.6 With customers increasingly opting for more budget-friendly alternatives in key markets like the U.S. and China, Starbucks is under pressure to revitalize its operations.
Since taking over as CEO last year, Niccol has been actively working to revamp the company, including initiatives aimed at speeding up service.7 This corporate restructuring is a further step in his strategy to navigate the current challenges.8
Prior to these layoffs, Starbucks employed approximately 16,000 individuals in roles outside of its store locations. The job cuts will primarily affect those in corporate support functions.9 However, employees in roasting, manufacturing, warehousing, and distribution will not be affected.
This strategic streamlining reflects Starbucks’ efforts to adapt to a competitive landscape and regain its footing.10 It remains to be seen how these changes will ultimately impact the company’s performance and its ability to re-engage its customer base.
