Starbucks, the world’s largest coffee chain, implemented its most extensive workforce restructuring on Monday.
Starbucks will terminate 1,100 positions at its headquarters and leave hundreds of existing vacant positions unfilled.
This is the largest reduction in Starbucks’ history.
The previous record was set in 2018, when the company cut approximately 350 jobs or 5% of its global headquarters workforce.
The unprecedented layoffs emerged as newly appointed CEO Brian Niccol implemented restructuring.
As of late September last year, Starbucks employed around 16,000 people at its headquarters, including store operations, development, and coffee roasting staff.
The company clarified that layoffs do not include roasting, manufacturing, warehousing, or delivery employees.
Café staff will also be exempt from the layoffs.
According to reports from The Wall Street Journal and other media outlets, Niccol stated in a press release that this downsizing would streamline operations and sharpen the company’s focus on its core objectives.
He emphasized that these changes are “crucial for Starbucks’ future success.”
Starbucks has grappled with experiencing continuous quarterly sales declines as customers increasingly express frustration with long lines and high prices.
Niccol, who is tasked with revitalizing the brand, has committed to restoring Starbucks’ classic café atmosphere, improving service efficiency, and enhancing the mobile ordering experience.
Following the restructuring announcement, Starbucks’ stock price rose.
In afternoon trading, shares rose by $1.78 (1.60%) to $113.53.
Concurrently, the S&P 500 index, a key indicator that best reflects market situations, climbed 0.27%, while the tech-heavy Nasdaq index dipped 0.15%.
As U.S. consumers reduce dining out, other restaurant chains adapt to changes.
Last week, Blooming Brands announced plans to cut about 100 employees in the support department at its Tampa, Florida headquarters, representing roughly 17% of its total support workforce.
Also, Yum Brands, the parent company of KFC, Taco Bell, and Pizza Hut, is relocating KFC’s headquarters from Louisville, Kentucky, to Plano, Texas. However, this move does not involve layoffs.
