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Starbucks Corp. has announced plans to eliminate 1,100 corporate jobs as part of a restructuring strategy aimed at increasing efficiency and accelerating the company’s turnaround. The job cuts, representing about 7% of Starbucks’ global corporate workforce, will not affect employees working in company-operated stores, warehouses, or production facilities.
Chief Executive Officer Brian Niccol, who took over in September amid declining sales, had first hinted at the restructuring in January. According to an internal announcement, affected employees will be notified by Tuesday, and corporate staff have been asked to work remotely for the week.
Job Cuts and Business Impact
The layoffs come as part of Starbucks’ effort to remove duplicative roles and streamline management. The coffee giant follows other major companies in reducing corporate layers, with Southwest Airlines recently announcing a 15% cut in its corporate workforce.
Despite the restructuring, Starbucks’ stock saw a slight increase of less than 1% at the start of U.S. trading. Over the past 12 months, the company’s stock has gained nearly 17%, slightly trailing the S&P 500 Index’s 18% increase.
Employee Support and Future Hiring
Starbucks employees impacted by the layoffs will continue receiving pay and benefits until May 2, followed by severance packages based on tenure. The company is also offering career transition support and other assistance to affected workers.
Additionally, the company is closing several hundred unfilled positions as part of the restructuring. However, baristas, café employees, and workers in warehousing, manufacturing, and roasting operations will not be affected by the cuts.
Return-to-Office Policy and Leadership Changes
Alongside the job cuts, Starbucks is reinforcing its return-to-office policy. Employees at the vice president level and above will now be required to work from the Seattle or Toronto offices at least three days a week. Director-level employees and below can maintain remote work status, though future hires will mostly be required to be based in Seattle or Toronto.
Since taking the helm, Niccol has reversed several leadership changes made by his predecessor and implemented new operational adjustments, including bringing back condiment bars and restricting stores to paying customers only.
His own work arrangement, however, has drawn criticism. While Starbucks has mandated in-office work for many employees, Niccol has been allowed to commute from his home in California to Seattle using the company’s corporate jet. In response to the backlash, Starbucks has stated that Niccol will spend most of his time at the company’s headquarters or visiting stores.
Sources By Agencies
