MOHAMMAD ZIYAUDDIN
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New York: Starbucks Corp. has announced the elimination of 1,100 corporate jobs, aiming to streamline operations and revitalize the company amid declining sales.
The job cuts affect about 7% of Starbucks’ global non-store workforce, while employees in cafes, warehousing, manufacturing, distribution, and roasting operations remain unaffected.
Why is Starbucks Cutting Jobs?
CEO Brian Niccol, who took over in September 2024, announced restructuring plans in January to reduce redundancy and improve efficiency.
Employees losing their jobs will be notified by Tuesday and were asked to work remotely this week.
Starbucks is also closing several hundred unfilled positions as part of the cost-cutting measures.
Brian Niccol on the Layoffs:
“I recognize this news is difficult. We believe it’s a necessary change to position Starbucks for future success.”
Severance & Support for Affected Workers
Workers will receive pay and benefits until May 2, 2025.
After that, they will get severance based on tenure.
Starbucks is also offering career transition support and other assistance.
Stock Market Reaction
Starbucks shares were up less than 1% at the start of US trading.
The stock has gained 17% in the past 12 months, slightly underperforming the S&P 500 Index’s 18% growth.
Starbucks Workforce Breakdown
Total Employees in the US (As of September 2024): 211,000
95% work in company-operated stores
Remaining work in corporate and other roles
Total Employees Worldwide: 150,000 (similar proportions outside the US)
Return to Office Policy
Starbucks is mandating in-office work for vice presidents and above, requiring them to be in Seattle or Toronto offices three days a week.
Directors and below can remain remote, but future hires will be required to work from Seattle or Toronto.
Niccol has reinforced the return-to-office policy, warning that employees who fail to comply could face termination.
CEO’s Travel Controversy: While enforcing in-office policies, Niccol himself commutes from California to Seattle on the company’s corporate jet, which has sparked backlash from employees and critics.
What’s Next for Starbucks?
Starbucks continues its focus on improving cafe operations, including:
Bringing back condiment bars
Limiting stores to paying customers only
Undoing leadership changes made by the previous CEO
