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Starbucks revealed plans to lay off 1,100 corporate employees and leave several hundred open positions unfilled, according to an announcement by CEO Brian Niccol on Monday, February 24, 2025. The cuts specifically target corporate support roles while sparing café workers, roasting, manufacturing, warehousing, and distribution staff.
The coffee giant is implementing these measures following four consecutive quarters of declining same-store sales. According to Niccol, the restructuring aims to "simplify our structure, remove layers and duplication, and create smaller, more nimble teams."
"Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration," Niccol explained in his message to corporate employees. "All with the goal of being more focused and able to drive greater impact on our priorities."
The Seattle-based company has struggled as customers increasingly turn to less expensive competitors in its two largest markets: the United States and China. These workforce reductions represent approximately 6.9% of Starbucks' corporate workforce, which numbered around 16,000 employees as of last year.
Since taking leadership, Niccol has prioritized operational improvements, particularly in speeding up service times. Industry analysts note that these efforts are critical as the premium coffee market faces increasing pressure from value-oriented alternatives.
Financial markets have been closely monitoring Starbucks' performance. The company's stock has shown volatility as investors assess whether these strategic changes will successfully reverse the sales decline trend that has persisted throughout 2024.
The announcement coincides with a broader trend of restructuring in the food and beverage industry as companies adapt to shifting consumer preferences and economic pressures. Starbucks' corporate headquarters in Seattle will likely see the most significant impact from these cuts.
Some employees were asked to work from home during the transition period, according to reports from the Financial Times. This approach aims to minimize disruption during the reorganization process while maintaining operational continuity.
Starbucks faces the challenge of balancing cost-cutting measures with innovation to regain market share. The company's ability to streamline operations while enhancing customer experience will be crucial for its recovery in an increasingly competitive landscape.
