Starbucks has announced huge cuts to its corporate workforce as part of its turnaround plans.
The coffee chain’s new CEO Brian Niccol announced on Monday that 1,100 employees would be laid off and hundreds of open positions would not be filled.
Niccol said the mass layoffs are ‘necessary’ to remove duplicate jobs and increase focus.
‘We believe it’s a necessary change to position Starbucks for future success,’ Niccol said in a statement.
As well as job losses Niccol also announced that corporate employees with vice-president or higher status must now go in to the office at least three days a week.
Starbucks has around 16,000 corporate employees who work on the business outside the day to day running of cafes. Store workers such as baristas – of which there are 345,000 – will not be affected.
The cuts are among the largest in the chain’s history, and the first since around 350 corporate jobs were cut in 2018.
Office staff have been asked to work from home this week while the company gives notice to those being laid off. They will be told on Tuesday if they are losing their jobs.
CEO Brian Niccol announced on Monday that 1,100 employees would be laid off
News of the cuts sent shares more than one percent higher on Monday morning.
Despite Niccol’s turnaround plans Starbuck’s still reported its fourth consecutive quarter of declines, with sales down 4 percent in the quarter ending in December.
The chain has suffered after customers grew tired of years of price hikes, long lines and poor service.
Niccol has slashed the number of deals and menu options in an effort to boost the company’s bottom line.
He has also cut the popular perk of being able to visit a Starbucks location without ordering anything.
The former Chipotle CEO is also considering reintroducing free newspapers to the chain’s 16,000 stores.
Self-service condiment bars, where customers can add their own extra milk and sugars, are also being reinstated.
Shortly after taking over the top job Niccol went undercover to Starbucks locations to investigate customer’s gripes.
Corporate employees have been asked to work from home until they layoffs are complete
After discovering how long it took to get his basic Americano, Niccol pledged to speed up service and bring back Starbucks’ old cafe vibe.
