Starbucks has announced plans to lay off approximately 1,100 corporate employees and eliminate numerous vacant job positions, marking the largest workforce reduction in the company’s history. The announcement was made on Monday, highlighting a significant transformation within the corporate structure.
In a letter to staff, CEO Brian Niccol expressed that the motive behind these cuts is to “operate more efficiently, increase accountability, reduce complexity and drive better integration.” This restructuring comes as the company seeks to streamline its operations, with Niccol noting that the existing structure may have created inefficiencies due to excessive layers of management and roles primarily focused on coordination.
Starbucks employs around 16,000 corporate staff globally, with about 10,000 based in the United States. Notably, the layoffs and position eliminations will not affect warehouse, roasting, or store employees. The cuts were initially hinted at by Niccol in January 2025, as part of an overarching corporate strategy aimed at improving operational efficacy.
Earlier this year, Niccol indicated that the company’s size and structure might hinder its agility and responsiveness in the marketplace. He reiterated his aim to enhance service times in Starbucks outlets, streamline the menu offerings, and explore new ordering technology.
In addition to these operational changes, Niccol has been navigating the complex landscape of unionisation within the company. Workers represented by Starbucks Workers United have successfully unionised at over 500 stores across the U.S., involving upwards of 10,500 employees. Since the first successful union election at a Starbucks location in late 2021, the union has been actively pursuing a first contract, but negotiations reached a stalemate towards the end of 2024, resulting in strikes during the holiday season as workers demanded better economic conditions.
The union has also raised concerns regarding Niccol’s compensation, particularly following reports that he received approximately $96 million in the first four months of his tenure, which has sparked criticism amid ongoing contract negotiations. As Starbucks undergoes this structural and operational overhaul, the dynamics between corporate leadership and unionised workers remain in focus.
Source: Noah Wire Services