Starbucks to dismiss 1100 corporate workers globally

Starbucks plans to lay off 1100 corporate employees globally as new chairman and CEO Brian Niccol streamlines operations.

In a letter to employees released Monday, Niccol said the company will inform employees who are being laid off by mid-day on Tuesday.

Niccol said Starbucks is also eliminating several hundred open and unfilled positions.

"Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration," Niccol wrote in the letter.

Starbucks has 16,000 corporate support employees worldwide but that includes some employees who are not affected, like roasting and warehouse staff.

Baristas in the company's stores are not included in the lay-offs.

Niccol said in January that corporate lay-offs would be announced by early March.

He said all work must be overseen by someone who can make decisions while the the Seattle 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 co-ordinating work," Niccol wrote.

Starbucks hired Niccol last year to turn around sluggish sales.

He has said he wants to improve service times - especially during the morning rush - and re-establish stores as community gathering places.

Niccol is also cutting items from Starbucks; menu and experimenting with its ordering algorithms to better handle its mix of mobile, drive-through and in-store orders.

Starbucks' global same-store sales, or sales at locations open at least a year, fell 2 per cent in its 2024 fiscal year, which ended on September 29.

In the United States, customers tired of price increases and growing wait times.

In China, its second-largest market, Starbucks faced growing competition from cheaper rivals.