Starbucks Cuts 1,100 Jobs After Sales Slump

Starbucks is cutting 1,100 corporate jobs in a restructuring effort to improve efficiency and streamline operations. The move comes as the company struggles with slowing sales and aims to simplify its business under new CEO Brian Niccol.

Key Facts:

Starbucks is eliminating 1,100 corporate jobs, about 7% of its global non-store workforce.
The layoffs do not affect café workers, warehouse staff, or supply chain employees.
CEO Brian Niccol, who took over in September, had signaled restructuring efforts in January.
Affected employees will receive pay and benefits until May 2, followed by severance based on tenure.
Starbucks is also removing less popular menu items to speed up service.

The Rest of The Story:

Starbucks has become the latest major corporation to trim management layers, joining companies like Southwest Airlines, which recently announced its first-ever round of layoffs.

While the majority of Starbucks’ 211,000 U.S. employees work in cafés, corporate cuts are aimed at improving efficiency and adapting to changing consumer behavior.

Niccol, known for his turnaround efforts at Chipotle, has quickly moved to reverse some of his predecessor’s decisions.

His changes include reinstating condiment bars, tightening store policies to prioritize paying customers, and enforcing stricter return-to-office rules.

Starbucks is in a slump after a year of declining sales, boycotts, and executive turnover. They’ve hired former Chipotle CEO Brian Niccol to turn the tide. We sit down with him to discuss how he plans to bring customers back.
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Watch the full interview: https://t.co/JEkryJ6ySS pic.twitter.com/BF9Tww7IS4

— The Wall Street Journal (@WSJ) February 20, 2025

Starbucks shares saw a slight uptick following the layoff announcement, though they have underperformed the broader market over the past year.

Commentary:

Selling overpriced coffee is tough when inflation is eating into consumers’ disposable income.

Under the Biden administration, rising costs for gas, groceries, and everyday expenses mean fewer people are willing to shell out $6 for a latte.

Starbucks, once a go-to luxury for the middle class, is now struggling to justify its prices.

The company’s decision to alienate half its customer base in recent years with progressive activism hasn’t helped either.

From union battles to social justice campaigns, Starbucks took a stand on political issues—only to find that many of its former loyal customers decided to take their business elsewhere.

Now, with weaker sales, the company is scrambling to trim the fat and refocus on its core business.

Can Brian Niccol turn things around?

His success at Chipotle shows he knows how to simplify operations and make a brand relevant again.

However, the challenges Starbucks faces go beyond just efficiency.

If the company wants to regain its dominance, it needs to rethink pricing, customer service, and how it engages with the public.

A leaner Starbucks may be better for investors, but if everyday customers still feel squeezed by high prices, even the best restructuring plan may fall short.

The Bottom Line:

Starbucks is cutting corporate jobs to streamline operations and address slowing sales, but the bigger issue is whether consumers are willing to keep paying premium prices for coffee.

With inflation and past political missteps hurting its brand, the coffee giant faces an uphill battle.

The success of its turnaround will depend on whether new leadership can restore both efficiency and customer loyalty.