(Reuters) – Starbucks announced on Monday its decision to cut 1,100 corporate positions as CEO Brian Niccol continues to drive forward his efforts to revitalize the struggling coffee chain, which has been grappling with declining sales.
“We are restructuring our organization by eliminating redundant layers, reducing duplication, and forming leaner, more agile teams,” Niccol expressed in a communication to employees. “Our aim is to enhance operational efficiency, foster greater accountability, simplify complexities, and promote better cohesion.”
Niccol assumed the role of CEO last year during a period when the company’s stock had plummeted by 40% from its peak in 2021 due to sluggish demand in the U.S. and China. Known for his successful turnaround of the Chipotle Mexican Grill, he devised a strategic “Back to Starbucks” initiative focused on optimizing operations through workforce reductions and enhancing customer satisfaction at U.S. stores.
Since taking the reins six months ago, Starbucks’ shares have rebounded by over 22%, showing positive momentum. Early trading on Monday indicated a slight increase in Starbucks’ stock value.
According to its 2024 report, Starbucks currently employs approximately 211,000 individuals in the U.S. and around 150,000 internationally.
“We will continue to recruit for key positions that align with our revised support structure and provide the necessary skills and capacity,” Niccol affirmed, assuring that the changes would not impact in-store teams or the ongoing investments in extended store hours.
Furthermore, the company disclosed its decision to remove some “less popular beverages” from the menu, including a variety of frappuccino blended drinks and the white hot chocolate, aligning with Niccol’s strategy to streamline the menu offerings.
(Reporting by Neil J Kanatt and Ananya Mariam Rajesh in Bengaluru; Editing by Arun Koyyur)
