Bad News! This Company Sacks 1000 Employees in Bold Streamlining Move

Seattle: Starbucks has announced the layoff of 1,100 corporate employees worldwide as part of a broader effort to streamline operations under its new Chairman and CEO, Brian Niccol. The company is also eliminating several hundred open and unfilled positions in an attempt to improve efficiency and accountability.

In a letter to employees on Monday, Niccol stated that affected employees will be notified by mid-day Tuesday. He emphasized that the restructuring aims to reduce complexity, enhance decision-making, and drive better integration within the company.

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

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Baristas and Roasting Staff Not Affected

Starbucks currently employs 16,000 corporate support staff worldwide, though some teams—such as roasting and warehouse employees—will not be impacted by the layoffs. Importantly, store-level baristas and retail employees are not included in the job cuts.

Niccol, who took over in late 2023 to revive sluggish sales, had previously indicated that corporate layoffs would be announced by early March. He has criticized the company’s multi-layered management structure, arguing that excessive hierarchy slows decision-making and communication.

"Our size and structure can slow us down, with too many layers, managers of small teams, and roles focused primarily on coordinating work," he wrote.

Strategic Shift to Revive Growth

Since joining Starbucks, Niccol has pushed for faster service times, particularly during the morning rush, and a renewed focus on making stores community gathering spaces. He has also implemented menu reductions and introduced new ordering algorithms to optimize mobile, drive-thru, and in-store operations.

The restructuring comes as Starbucks faces declining global sales, with same-store sales dropping 2% in the 2024 fiscal year, which ended on September 29. In the U.S., customers have pushed back against rising prices and long wait times, while in China, Starbucks faces increased competition from lower-cost rivals.

Following the announcement, Starbucks shares remained flat in premarket trading on Monday.

(With AP Inputs)