Starbucks announced on Friday that it will be laying off an undisclosed number of employees as part of a restructuring of its corporate staff.
In a letter to staff, CEO Brian Niccol explained that the company needs to make sure every task has a clear owner capable of making decisions. He also mentioned that reducing complexity and breaking down silos within the organization is essential. According to Niccol, Starbucks’ large size and structure have been slowing down operations, with too many layers of management and roles that mainly focus on coordinating work.
These layoffs will not affect baristas working in Starbucks stores, and the company plans to communicate the specific decisions by early March.
Niccol acknowledged that the announcement would create uncertainty and concern but emphasized that he wanted to be transparent with employees about the progress and upcoming changes. He reassured staff that they would hear directly from him regarding these decisions.
Starbucks employs around 16,000 corporate staff globally, with 10,000 based in the U.S. and 6,000 in other countries. According to its annual report filed in September, the company has a total workforce of 361,000 worldwide.
The company faced disappointing sales over the past year as U.S. customers reduced their spending, and in China, shoppers turned to more affordable competitors.
In response to these challenges, Starbucks hired Brian Niccol in September. Niccol, who previously led Taco Bell and Chipotle, was brought in to help revitalize the company and address its recent struggles.