Starbucks is eliminating 1,100 corporate jobs in a move aimed at increasing efficiency and quickly enacting changes to revitalize the company.
The cuts represent about 7% of the global employee base working outside of company-owned stores, which also includes roles such as warehousing that aren’t affected by the restructure.
Starbucks doesn’t disclose how many corporate workers it has, and the bulk of its employees around the world work in its cafes.
CEO Brian Niccol, who took over in September amid declining sales at the coffee giant, had announced the impending restructuring in January. Workers who are losing their jobs will be notified by Tuesday, according to an announcement. Corporate employees were asked to work remotely the whole week.
Niccol is also taking aim at the coffee chain’s US menu, with the company saying on Monday that it’s removing some less popular drinks as part of a plan to simplify operations and serve customers faster.
As of September, Starbucks employed 211,000 people in the US, with 95% working in its more than 10,000 company-operated stores and the rest in corporate and other roles. The proportions are similar outside of the US, where the company employed 150,000.
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The cuts don’t affect workers in cafes, or in warehousing, manufacturing, distribution and roasting operations.
Workers losing their jobs will get pay and benefits until May 2. After that, they’ll get severance based on tenure, according to Starbucks. They’ll also get career transition support, among other assistance.
The coffee chain is closing several hundred open and unfilled positions as part of the restructure.
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“I recognise the news is difficult,” Niccol said in the announcement. “We believe it’s a necessary change to position Starbucks for future success.”
Starbucks employees in China, the coffee chain’s second-largest market, won’t be affected by the cuts, the company local unit said in a statement to Bloomberg News. “Starbucks is firmly optimistic about the prospect of the Chinese market,” it added.
Shares of Starbucks rose almost 17% in the past 12 months through Friday’s close, compared to a roughly 18% increase for the S&P 500 Index.
Return to office
Starbucks will start requiring that employees at the vice president level and above to work out of the Seattle or Toronto offices three days a week. Workers at the director level or below will able to keep their remote status, though hiring for future roles will mostly require being in Seattle or Toronto.
Niccol, the former Chipotle Mexican Grill Inc. CEO, has moved swiftly to enact changes to help cafes run more smoothly, including bringing back condiment bars and limiting stores for paying customers only.
The CEO has also undone several leadership changes implemented by his predecessor and doubled down on the company’s return-to-office policy, warning that staff who didn’t come in three days a week could be fired, Bloomberg News reported.
Yet the CEO’s own work arrangement, which allows him to travel from his home in California to the company’s Seattle headquarters on the company’s corporate jet, garnered backlash from some workers and outside critics. Starbucks has said that Niccol will spend most of his time in Seattle or visiting stores.
