Starbucks, the renowned coffee giant, has recently implemented significant measures in a bid to navigate challenging times and ensure its survival. The company disclosed on Monday its decision to lay off more than 1,000 employees and eliminate intricate and unpopular beverages from its menu as part of a strategic move to combat declining sales and rejuvenate the iconic coffee chain.
Among the items being axed are certain Frappuccino blended drinks, including the Royal English Breakfast Latte and White Hot Chocolate, as Starbucks aims to streamline its operations and streamline its menu offerings. In a statement announcing the menu modifications, the company explained that these specific drinks were not frequently ordered, posed complexities in their preparation, or were similar to existing beverages on the menu.
Earlier in January, Starbucks revealed plans to slash 30% of its menu items to simplify its processes. Already, items such as the iced energy drinks and the controversial olive oil coffees have been discontinued from the menus. The company has been grappling with a downward sales trend persisting for three consecutive quarters in 2024, marking its longest decline in recent years. Factors contributing to this decline include customer dissatisfaction over high drink prices and extended wait times, leading some patrons to cease patronizing Starbucks. Additionally, a notable number of Starbucks locations have seen employees vote to unionize in protest of perceived issues surrounding pay, benefits, and working conditions.
Mobile ordering has become increasingly popular, with more than 30% of Starbucks’ orders now being placed via customers’ smartphones for quick pickup. This surge in mobile orders has at times strained Starbucks’ staff, particularly during peak hours. In line with these adjustments, Starbucks also announced a reduction of approximately 1,100 corporate positions, while indicating that several hundred vacant roles will be eliminated. Moreover, employees at the Vice President level or higher will now be required to attend the company’s headquarters in Seattle or Toronto at least three times a week.
Under the leadership of newly appointed CEO Brian Niccol, who joined from Chipotle in August 2024, Starbucks is embarking on an ambitious revitalization plan. Niccol, recognized in the industry as a turnaround specialist, is the company’s fourth CEO in two years. His vision is to refocus Starbucks as a welcoming “community coffeehouse” that prioritizes comfortable seating over expedited to-go orders. As part of this transformation, Niccol has reintroduced the tradition of baristas doodling on cups and reinstated self-serve milk and sugar stations.
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