Starbucks Corp. will lay off 1,100 corporate employees this week as CEO Brian Niccol seeks to streamline operations and reverse declining sales, according to an internal memo obtained by Yahoo Finance. The job cuts, which do not affect store employees, are part of a broader effort to eliminate redundancies and create a more agile corporate structure, the company said.
"Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration," Niccol wrote in the letter to staff. "All with the goal of being more focused and able to drive greater impact on our priorities."
The layoffs will primarily target Starbucks' corporate support roles, while employees in roasting, manufacturing, warehousing, and distribution operations will be unaffected. The company is also eliminating several hundred open positions that will no longer be filled. Employees affected by the job cuts will be notified by Tuesday, February 25, and will receive a severance package that includes pay and benefits until at least May 2, sources said.
The Seattle-based coffee giant employs approximately 361,000 workers worldwide, including 211,000 in the U.S., with the majority working in its retail stores. Starbucks had 16,000 corporate employees as of last year, making the current layoffs a significant downsizing of its support staff.
As part of the restructuring, Niccol also directed North American vice presidents and higher-ranking executives to work in-person at least three days per week in Seattle and Toronto, though the company's broader hybrid work policy will remain unchanged for existing employees. Future hires for director-level and below positions will be required to be based in Seattle or Toronto, except for designated remote positions.
The job cuts come amid a period of declining sales and foot traffic for Starbucks. The company reported a 4% drop in global same-store sales and a 6% decline in foot traffic in its most recent quarter, marking the fourth consecutive quarter of declines. While Starbucks managed to beat low earnings expectations, its earnings per share of $0.69 reflected a 23% year-over-year drop.
Niccol, who took over as CEO in September 2024, has implemented a "Back to Starbucks" strategy focusing on core coffee products, pricing adjustments, and improved service speed. The company attributed part of its recent earnings decline to "heightened investments" in Niccol's turnaround plan.
"The first quarter in 2025 results met our expectations, clearly show[ed] some signs of progress ... we still have much work to do," Niccol told investors during an earnings call.
