Starbucks will lay off 1,100 workers and remove several hundred other unfilled positions, the company announced Monday.
Impacted employees will be notified by midday Tuesday. In-store workers aren’t affected.
The news comes a month after CEO Brian Niccol warned that job cuts were coming as part of the “Back to Starbucks” comeback plan. The goal is to simplify structure, remove duplication, and create smaller teams that can work quickly and more efficiently.
“I recognize the news is difficult,” Niccol said in an open letter. “It is not a decision the leadership team took lightly. We understand the real effect this has on partners’ lives and their families. We believe it’s a necessary change to position Starbucks for future success — and to ensure we deliver for our green apron partners and the customers they serve.”
The chain still intends to grow. Starbucks will continue to hire for priority positions that fit with its new support structure, Niccol said.
In addition to the layoffs, Starbucks now mandates that those with VP roles and higher in North America must work out of the Seattle and Toronto offices at least three days per week. The brand will keep a set of “in-market” VP roles and higher to directly support hourly employees and coffeehouse operations in certain geographies.
For the most part, remote employees working in a director role or below will keep their remote status. Hiring for future roles will require employees to be in Seattle or Toronto, except for enterprise designated remote positions.
“I know this process is challenging and recognize the impact it will have on partners whose roles are being eliminated,” Niccol said. “Starbucks is what it is today because of the contributions of incredible partners, like you. On behalf of the executive leadership team, thank you. We appreciate all you’ve done for our company, our partners and our customers, and we’ll do all we can to support you.”
Starbucks’ U.S. quick-service share recovered in Q1 following two quarters of declines. And it did so despite reducing the frequency of discount-driven offers—there were 40 percent fewer such transactions in the period, year-over-year. Through the quarter, the brand saw a shift in sales mix toward coffee and espresso-based beverages, which over-delivered and compensated for lower-than-expected performance across holiday promotions.
Same-store sales declined 4 percent (8 percent drop in traffic and 4 percent rise in ticket) in the North America and U.S., yet improved over the course of three months, and non-Starbucks Rewards traffic grew, quarter-over-quarter. Members and spend lifted versus Q4 and year-over-year, and price parity for non-dairy milk customizations brought back lapsed Rewards users.
Since late January, guests who order a beverage “for here” have been served a coffee mug, glass, or in the customers’ personal cup. Guests may also receive free refills of hot brewed or iced coffee, or hot or iced tea. Starbucks also officially brought back the condiment bar, including the return of creamer, milk, and several sweeteners.
Starbucks is also working on four-minute wait times, adding staffing in thousands of shops, and writing order names on cups with Sharpie markers.
