Starbucks is planning to lay off 1,100 employees worldwide, new chairman and CEO Brian Niccol said in a letter to staff Monday.
Niccol said employees who are being laid off will be informed by mid-Tuesday and the company would also eliminate “several hundred additional open and unfilled positions.”
“We are simplifying our structure, removing layers and duplication and creating smaller, more nimble teams. Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration. All with the goal of being more focused and able to drive greater impact on our priorities,” Niccol said in his letter to employees.
A spokesperson for Starbucks told Global News that they did not have any information at this stage about whether Canadian employees would be affected. However, Niccol’s letter mentioned “new leadership expectations” for the North American executive leadership teams.
“Moving forward, vp+ leaders in North America will need to be present with their teams in our Seattle (U.S.) and Toronto (Canada) offices at least three days a week,” he said in his letter.
Get daily National news
Niccol added that while existing employees will continue to keep their hybrid or remote work structures, “Hiring for future roles will require partners to be Seattle or Toronto based, except for enterprise designated remote positions.”
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.
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 the Seattle coffee giant reduces the complexity of its structure and eliminates silos within the company that slow 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 wrote.
Starbucks hired Niccol last fall to turn around sluggish sales. He has said he wants to improve service times — especially during the morning rush — and reestablish stores as community gathering places.
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.
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 U.S., customers tired of price increases and growing wait times. In China, its second-largest market, Starbucks faced growing competition from cheaper rivals.
Starbucks shares were flat in premarket trading Monday.
–with files from Associated Press
Comments