Starbucks is gutting 5% of its corporate workforce

The layoffs of some 350 employees are an effort to make the struggling chain more nimble, according to its CEO.
Photograph: Shutterstock

Starbucks cut 5% of its global corporate workforce Tuesday, some 350 employees, in a bid to streamline the once-unstoppable chain, which has contended with weak sales and traffic in recent quarters.

“Every single decision was made after very careful consideration and reviewed with leaders across the company,” Starbucks CEO Kevin Johnson wrote in a letter to employees distributed Tuesday. “And while incredibly difficult, they came as a result of work that has been eliminated, deprioritized or shifting ways of working within the company.”

The layoffs were announced in September, when Johnson penned an internal employee memo saying the chain would be making “significant changes” to “increase the velocity of innovation.”

At the time, Johnson said there would be job losses, redeployments and other structural changes, but did not specify how many employees would be affected. 

No layoffs are planned at the retail store level.

Starbucks has been reviewing the functions of its corporate teams, starting at the senior vice president and vice president levels, according to a report in the Seattle Times. Most of the layoffs are expected at the company’s Seattle headquarters.

“Starbucks is proud to call Seattle its hometown and remains committed to the Emerald City in this next phase of growth,” a company spokeswoman told Restaurant Business.

Earlier this month, Starbucks reported same-store sales growth of 4%, its strongest posting in the last five quarters. Revenue climbed 10.6% from a year ago. Traffic, however, remains down, and activist investor William Ackman, who owns more than 10 million shares of the company, said he is keeping a close watch on the chain.

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