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Starbucks is laying off 1,100 corporate employees as part of an effort to streamline operations and focus on its core business, CEO Brian Niccol said in a statement on Monday.
In a message to employees, Niccol said the decision was made to simplify the company’s structure, eliminate redundancies, and build more efficient teams. While Niccol had previously announced layoffs in January, he had not yet revealed the exact number.
“I recognize the news is difficult,” Niccol said. “It is not a decision the leadership team took lightly.” He acknowledged that impact these layoffs will have on employees and their families, but emphasized that they are a “necessary change” for Starbucks (SBUX+1.54%) to succeed.
The layoffs, which are among the largest in the company’s history, include thousands of current employees as well as several hundred unfilled positions that will be eliminated.
Employees affected by the layoffs will be notified by Feb. 25, with further details on severance packages and career transition support to follow.
As part of its “Back to Basics” plan, Starbucks has been evaluating its corporate structure for months. The broader strategy aims to return the company to its premium coffeehouse roots.
In addition to the job cuts, Starbucks is adjusting its leadership expectations. VPs and higher-level executives in North America will now be required to work from the company’s Seattle or Toronto offices at least three days a week. Future corporate hires will be expected in one of these locations unless designated as remote positions. Existing remote employees below the director level will maintain their work arrangements.
In Oct. 2024, Starbucks informed its corporate staff that they would need to come into the office three days a week or risk termination. Niccol, who became CEO of Starbucks in Aug. 2024, has been a strong proponent of in-person work, stating that he believes the office is typically the best environment for collaboration.
Starbucks’ latest move follows a series of other significant changes, including a commitment to deliver fresh-brewed coffee in under four minutes, trimming the menu by 30%, removing the up-charge for non-dairy milk alternatives, and tripling parental for U.S. baristas. The company has also tapped two former Taco Bell executives to help with operations and customer experiences.
Not all changes have been met with approval. In January, Starbucks said it would rather close locations than reinstate its open-door policy. This marks a sharp reversal from its 2018 open door policy, which was implemented after two Black men were arrested for trespassing at a Philadelphia store while waiting for friend to arrive before making a purchase.