Starbucks lays off 1,100 corporate employees, cuts menu items to streamline operations amid falling sales

In a letter to employees released on Monday, new chairman and CEO Brian Niccol said that affected staff would be notified by midday Tuesday. The company 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 employs approximately 16,000 corporate support staff globally, including roles in roasting and warehouse operations, which are not impacted by these layoffs. Baristas and in-store employees are also unaffected.

Niccol, who assumed leadership last autumn to address declining sales, had indicated in January that corporate layoffs would be announced by early March. He said there’s a need for all work to be overseen by decision-makers, aiming to reduce structural complexity and eliminate silos that hinder communication within the company.

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

Under Niccol's direction, Starbucks is also cutting items from its menu and refining ordering algorithms to better manage mobile, drive-thru, and in-store orders. These initiatives aim to improve service times, particularly during peak morning hours, and reestablish stores as community gathering places.

In its 2024 fiscal year, which ended September 29, Starbucks reported a 2% decline in global same-store sales. In the U.S., customers have expressed dissatisfaction with rising prices and longer wait times, while in China, the company's second-largest market, Starbucks faces increased competition from more affordable rivals.

Additionally, Starbucks has been dealing with financial challenges due to boycotts. In Malaysia, the company's franchise holder reported a net loss of 70.3 million ringgit (approximately $15.1 million) for the six-month period ending in December, attributing the losses to ongoing boycotts over geopolitical issues in Palestine.