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Starbucks has announced plans to cut 1,100 jobs at its corporate offices as new CEO Brian Niccol seeks to revitalize the global coffee chain. On Monday, the company informed staff in corporate roles that they would need to work remotely this week as it communicated with employees facing layoffs.
This marks the first job reduction for Starbucks corporate staff since 2018 when around 350 positions were removed. Importantly, the cuts will not affect positions within the coffee shops. The company stated that employees set to be laid off would receive notifications on Tuesday.
Niccol, who joined in September, aims to address declining foot traffic and sales at Starbucks. In the quarter ending December, the same-store sales had decreased by 4 percent.
In a letter to employees on Monday, Niccol outlined that Starbucks would be eliminating 1,100 currently filled positions, along with several hundred more that are currently open and unfilled.
Starbucks employs about 361,000 individuals, predominantly in its over 21,000 coffee shops worldwide. Approximately 16,000 employees work in corporate support roles across locations including the Seattle headquarters, store development, roasting, manufacturing, warehousing, and distribution. However, the company did not specify the exact number of corporate support positions.
Previously, Niccol had announced the forthcoming reductions, citing an aim to streamline operations, increase accountability, reduce complexity, and enhance integration.
On Monday, Starbucks shares rose by 1.3 percent on Wall Street. Niccol also indicated that vice-presidents or higher-level staff currently working remotely would need to spend at least three days a week in the Seattle or Toronto offices. Employees with director-level positions and below can continue working remotely.
Niccol’s employment agreement offered him a “small remote office” in California, with no relocation requirement to Seattle, though the Newport Beach office has not yet been completed. It has been noted that Niccol manages the business globally, engaging with customers and stakeholders, while Starbucks reported $36.2 billion in revenue last year.
This week, Starbucks requested corporate employees to work remotely to maintain privacy while notifying those affected by the layoffs. A member of the executive leadership team will email employees whose roles have been cut.
