Starbucks announced on Tuesday it was laying off about 5 percent, or 350, of its corporate employees at Starbucks Headquarters.
This round of layoffs comes as a part of the company’s reorganization, which was announced in late September. Starbucks’ chief executive officer Kevin Johnson hinted at these layoffs in a memo he sent to employees about the shifting priorities of the company. “We must increase the velocity of innovation that is relevant to our customers, inspires our partners, and is meaningful to our business,” Johnson said in the memo. “To accomplish this, we are going to make some significant changes to how we work as leaders in all areas of the company.”
Today, in an email to employees, Johnson said the job cuts “came as a result of work that has been eliminated, deprioritized, or shifting way of working within the company,” reported the Seattle Times.
Starbucks posted same-store sales gains of 4 percent in the U.S. and Americas during the third quarter—its best in five quarters.
During a November 1 conference call, Roz Brewer, Starbucks’ chief operating officer, noted that in order to keep up positive momentum moving into 2019, the organization would need to evolve as well.
“The opportunity to unleash and democratize information across the entire enterprise, to ensure our customer is at the center of our day-to-day decision-making, is powerful,” Brewer said during a conference call. “And by having a smaller team and an easily accessible single source of the truth, we are enabling faster decision-making and delivering more relevant products and improved experiences.”
Both Johnson and Brewer reiterated the company’s commitment to increasing shareholder returns and reducing general and administrative expenses is one way to achieve this.
“We view this as a multiyear initiative with our primary focus on increasing the velocity of innovation that results in a more efficient operation as measured by G&A as a percent of system sales,” Johnson said. “All of these actions to streamline the company and change the way we work have freed up capital, which supports our commitment to return $25 billion to shareholders through fiscal 2020."