Starbucks announced plans to lay off 1,100 corporate employees globally and remove 13 “less popular” drinks from its menu, effective March 4. These moves are part of a broader restructuring strategy under CEO Brian Niccol to enhance efficiency and concentrate on customer favorites.
In a letter to employees, Niccol stated, “Our intent is to operate more efficiently, increase accountability, reduce complexity, and drive better integration.” The layoffs will affect corporate support roles, including roasting, distribution, and store development, but will not impact baristas or in-store staff.
Concurrently, Starbucks will eliminate several beverages from its menu to simplify operations and reduce wait times. The drinks being discontinued include various Frappuccino flavors, the Royal English Breakfast Latte, and White Hot Chocolate. The company explained, “These items aren’t commonly purchased, can be complex to make, or are like other beverages on our menu.” This reduction aims to “focus on fewer, more popular items, executed with excellence.”
Despite a 2% decline in global same-store sales during the 2024 fiscal year, Starbucks recently reported better-than-expected sales for its fiscal first quarter, with revenue flat at $9.4 billion, surpassing Wall Street’s forecast of $9.3 billion. Niccol attributed this performance to customer-focused changes, such as removing extra charges for non-dairy milk and streamlining the menu.
Looking ahead, Starbucks plans to introduce new items, including the recently launched Cortado and a forthcoming Iced Cherry Chai, set to debut in the spring. By the end of the 2025 fiscal year, the company anticipates a 30% reduction in its U.S. menu, allowing for a more focused and efficient operation.
These strategic changes reflect Starbucks’ commitment to enhancing customer experience and operational efficiency in a competitive market.