‘Our size and structure can slow us down, with too many layers, managers of small teams and roles focused primarily on coordinating work’
A Major coffeee chain has announced plans to axe 1,100 corporate positions across the globe.
The new Chairman and chief executive of Starbucks, Brian Niccol, laid out the strategy in a letter to staff on Monday. According to Mr Niccol, those affected will be notified by Tuesday noon. The shake-up doesn’t also involves scrapping hundreds of vacant roles yet to be taken up.
“Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration,” Mr Niccol penned in his memo. Starbucks boasts a corporate workforce of 16,000 globally, but the clear-out won’t hit everyone – notably, roasting and warehouse personnel are safe, as are baristas.
Back in January, Mr Niccol flagged up that these cuts were on the horizon, set for an early March announcement. He stressed that oversight of all work should rest with individuals capable of swift decision-making as the coffee giant reduces the complexity of its structure and eliminates silos within the company that slow communication.
“Our size and structure can slow us down, with too many layers, managers of small teams and roles focused primarily on coordinating work,” Niccol explained. Last autumn, Starbucks brought in Mr Niccol to boost sluggish sales figures.
He aims to reduce service times, especially when the morning rush hits, and reestablish the brand’s role as a central hub for communities.
Mr Niccol is also streamlining Starbucks’ menu and changing its ordering algorithms to optimise the handling of mobile, drive-thru and in-store orders. Starbucks’ global same-store sales, a measure of sales at locations open for at least a year, dipped 2% in its 2024 fiscal year, which concluded on September 29. In the U.S., customers grew weary of price hikes and extended wait times.
Meanwhile, in China, Starbucks’ second-largest market, the coffee giant grappled with intensifying competition from more affordable competitors. Starbucks shares remained steady in premarket trading on Monday.
