Starbucks Streamlines Operations with Job Cuts
Starbucks (SBUX) is implementing cost-cutting measures as part of its "Back to Starbucks" plan. CEO Brian Niccol outlined the need for "difficult decisions and choices" to "operate more efficiently" in a letter to employees. These measures will include job eliminations and the downsizing of support teams.
The layoffs are expected to impact approximately 10,000 corporate support roles globally, primarily in the United States and Canada. Niccol noted recent positive steps taken by the company, such as restoring condiment stations and eliminating extra charges for alternative milk. Starbucks also aims to improve customer experience by setting a goal to serve handcrafted beverages within four minutes and extending shifts in over 3,000 stores.
Despite these efforts, Starbucks stock has underperformed the S&P 500 in the past year, indicating the need for further improvements. Analysts believe that the company's turnaround strategy has potential for success, with better marketing, operations, and innovation driving traffic growth in the coming months.
In addition to the job cuts, Starbucks has also announced changes to its code of conduct, which now limits in-store seating to paying customers. The company has also suspended its full fiscal year 2025 guidance to reassess its business and solidify strategies for its ongoing transformation.