Layoffs And Changes Are Part Of Starbucks’ Company Restructuring Plans

Starbucks announced a "significant change" to the company's plans. This, unfortunately, included a few major changes like layoffs and leadership changes, the majority of which was on a letter sent by CEO Kevin Johnson to the company's employees.

Reuters reported that a Starbucks spokesperson said the company planned to have some "role expansions," but this also included some layoffs as well as a few redeployments of personnel. There had been no clarifications about why this is happening, but it is speculated that the trade tariffs between the US and China have affected even the coffee giant. Adding to their troubles is a US market that's "cooling" to the coffee company as well as "heavy competition."

It remains to be seen whether a Chinese expansion, which the company is currently eyeing, will be affected by the reorganization. The CEO further explained that the changes were set to take effect as early as next week. The shift in leadership, as well as "non-retail partner impacts," will occur through mid-November.

The re-organization was needed in the pursuit of innovation, the CEO continued in the letter. He explained that these improvements were needed for the sake of the customers, the expansion of the business, and the improvement of the company's "partners." This is needed to be able to assess the different areas of the company as well as to see what changes are needed to impact the company in a positive way.

Starbucks has been under pressure to improve its services following the problems with people and growing competition. It has since announced this year that shops which were not strong in sales were on the list to be closed. There were whole areas that had many of them. USA Today reported that it had been regular for the coffee company to close non-performing shops, but this had been, by far, the most number of shops they've closed. Normally, 50 locations are closed by the company, but this year, 150 locations are about to close-in only a month.

Starbucks has already seen it's fair share of leadership change with the departure of former CEO Howard Schultz. This reflected badly on the company for investors, and it puts a shadow on how the company will move forward sans the leadership of the former CEO.