Operations

Starbucks plots layoffs, organizational changes

“We must increase the velocity of innovation,” the coffee chain’s CEO wrote in an internal memo.
Photograph: Shutterstock

Starbucks, struggling with weak same-store sales growth in recent quarters, is planning layoffs and leadership changes, according to an internal memo from the coffee giant’s CEO obtained by Restaurant Business.

“We must increase the velocity of innovation that is relevant to our customers, inspires our partners, and is meaningful to our business,” Kevin Johnson wrote in a message to all Starbucks employees dated Sept. 20. “To accomplish this, we are going to make some significant changes to how we work as leaders in all areas of the company and how functional groups are structured to support our retail stores.”

Starbucks will be implementing the organizational changes from now until mid-November, he said.

“There will be job losses, jobs expanding and some redeployments,” a Starbucks spokesperson confirmed, while declining to provide layoff numbers or specifics surrounding the organizational changes. The shifts will likely affect the vice president and senior vice president levels, not the C-suite, the spokesperson added.

The layoffs were first reported by Bloomberg.

“Change can be difficult, but our culture and our legacy are built on continuing to challenge the status quo,” Johnson wrote.

Starbucks is looking to become more agile by creating smaller teams to help speed the pace of innovation. The chain is also looking to find ways to automate manual processes, the company said.

Starbucks has reported sluggish sales in recent quarters and has even shuttered some units amid declining traffic. The company’s same-store sales grew just 1% in the most recent quarter, while traffic fell 2%.

It’s been a tumultuous time for the company, which in recent months has closed stores for a half day for anti-bias training and has seen the retirement of Executive Chairman and former CEO Howard Schultz.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Technology

The tech buzz at RLC was all about personalization

Tech Check: Restaurants clearly want to make their digital customers feel seen, judging by conversations at the Restaurant Leadership Conference this week. It’s what consumers say they want, too, but will it work?

Financing

Franchising can put brands at a disadvantage in a market like this

The Bottom Line: Restaurant chains like &pizza and MOD Pizza continue to turn to franchising to reinvigorate growth or save dying concepts. But there are huge disadvantages when consumers are cutting back.

Technology

How drive-thru AI made a believer out of Taco John's CEO Heather Neary

The leader of the fast-food chain was skeptical of the technology when she joined the company last year. Now she hopes to bring it chainwide.

Trending

More from our partners