CEO Brian Niccol Restructures Leadership as Company Struggles with Declining Sales
Starbucks (SBUX) is set to eliminate 1,100 corporate support roles as part of CEO Brian Niccol’s broader efforts to revamp the coffee giant’s operations. The layoffs, announced in a company-wide letter obtained by Yahoo Finance, come as Starbucks continues to grapple with declining sales and increased operational costs.
Niccol, who took over in September, stated that the move is aimed at simplifying Starbucks’ corporate structure by reducing redundancy and streamlining teams. “Our intent is to operate more efficiently, increase accountability, reduce complexity, and drive better integration,” Niccol said.
Affected employees will receive a severance package that includes salary and benefits through at least May 2, additional severance based on tenure, six months of COBRA-assisted healthcare, and career coaching. The layoffs will not impact in-store employees or those in roasting, manufacturing, warehousing, and distribution.
Alongside the job cuts, Starbucks is enforcing stricter in-person work policies for senior leadership. Vice presidents and higher-ups in North America must now be in Seattle or Toronto offices at least three days a week, though hybrid work arrangements for existing employees remain unchanged.
This restructuring follows a disappointing first-quarter earnings report that saw global same-store sales fall 4% and foot traffic decline 6%—marking four consecutive quarters of declining sales. While revenue remained flat, earnings per share fell 23% year over year to $0.69, largely due to increased spending on Niccol’s turnaround initiatives.
As Starbucks pivots back to its core coffee products, adjusts pricing strategies, and focuses on efficiency, investors will be watching closely to see if Niccol’s “Back to Starbucks” plan can reignite growth.
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