In a Monday message to employees, Starbucks CEO Brian Niccol announced the Seattle-based coffee giant is planning to lay off 1,100 employees as the company continues to face headwinds amid declining sales, competition and a loss of brand caché.
Starbucks had non-retail employee rolls of about 16,000 as of last year but Niccol noted in his announcement that workers at the company’s stores will not be impacted by the current round of cuts.
Niccol, the former chief executive of fast-casual restaurant chain Chipotle, took over as Starbucks CEO last September with the task of turning around the mermaid coffee brand, which has seen four straight quarters of declining sales.
In his announcement, Niccol wrote that the workforce reductions will apply to “current support partner roles and several hundred additional open and unfilled positions.”
“We are simplifying our structure, removing layers and duplication and creating smaller, more nimble teams,” Niccol said. “Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration. All with the goal of being more focused and able to drive greater impact on our priorities.”
How many stores does Starbucks have?
Niccol recognized some of Starbucks' foremost challenges when he was announced as the company’s new top executive last fall.
“Many of our customers still experience this magic every day, but in some places — especially in the U.S. — we aren’t always delivering,” Niccol said in September, per AP. “It can feel transactional, menus can feel overwhelming, product is inconsistent, the wait too long or the handoff too hectic. These moments are opportunities for us to do better.”
Starbucks operates over 40,000 stores globally with just over 17,000 company-owned and licensee-operated retail locations in the U.S. As of 2023, Starbucks had just over 100 retail locations in Utah.
Analysts, and Niccol himself, note U.S. Starbucks customers have tired of long wait times and high prices alongside stiff competition in international locations, including China, the company’s second largest market, where lower-priced rivals are challenging Starbucks’ dominance.
But while Starbucks has been riding a year-long slump, the company topped most sales expectations in its latest quarterly reporting, released last month, and Niccol-directed changes such as the decision to stop charging extra for non-dairy milk and a streamlining of the menu, boosted store traffic and improved service, according to a report from the Associated Press.