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Starbucks will lay off 1,100 corporate employees globally and cut its menu by 30 per cent as new Chairman and CEO Brian Niccol attempts to streamline operations.
In a letter to employees released on Monday, Niccol said the company will inform employees who are being laid off by midday Tuesday. Several hundred open and unfilled positions will also be eliminated.
“Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration,” he wrote in the letter.
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.
From March 4, a selection of “less popular beverages” and food items will also be removed to “help reduce wait times, improve quality and consistency”.
Items include some Frappuccino drinks, the Royal English Breakfast Latte and the White Hot Chocolate.
“These items aren’t commonly purchased, can be complex to make, or are like other beverages on our menu,” the company said.
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 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, an experienced marketer who previously led Taco Bell and Chipotle, 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 experimenting with its ordering algorithms to better handle its mix of mobile, drive-thru and in-store orders.
Chris Kayes, a professor of management at The George Washington University, previously told AP that Niccol is a highly regarded “celebrity CEO” who has proven he can turn around a struggling company.
When Niccol arrived at Chipotle in 2018, the Mexican chain was reeling from multiple food poisoning outbreaks. Five years later, its annual sales had nearly doubled.
“We look forward to the fresh ideas that Brian will bring to our business,” the company said in a statement after announcing his appointment.
