Dive Brief:
- Starbucks CEO Brian Niccol said Friday that he expects planned changes to corporate structure would entail “job eliminations and smaller support teams moving forward.”
- Niccol said in a letter that the company would clarify the changes to its workforce and procedures by early March.
- The proposed changes are part of leadership’s ongoing efforts, called Back to Starbucks, to restructure the company, revive the fortunes of the Starbucks brand in stores and recover from several quarters of dismal sales performance.
Dive Insight:
Niccol said Starbucks “[has] some opportunities to operate more efficiently.”
The reforms are based around three changes. Niccol wants to clarify decision-making and accountability; reduce organizational complexity and eliminate unspecified conflicting goals; and trim organizational complexity and “reduce silos.”
Starbucks did not immediately respond to a request to clarify the extent of the potential layoffs or how reducing support teams would change in-store experience.
In the letter about the job cuts, Niccol wrote that the changes would not impact store-level teams and that the company was still planning to increase hours.
As part of Back to Starbucks, Niccol said the chain has “provided additional coverage hours in over 3,000 stores.”
The brand has made a number of other changes under Niccol. Starbucks eliminated non-dairy milk upcharges and is in the process of bringing back the coffee condiment bar and in-store ceramic mugs.
A number of companies in the restaurant industry have resorted to corporate layoffs in recent months. Panera Brands laid off an unspecified number of people in October, and Olo shed 9% of its workforce in September despite revenue growth and profitability.
