Struggling Starbucks cuts menu, lays off 1,100 employees

Starbucks is going into a weight loss program. The American coffee giant, whose sales have been declining for several quarters , will reduce its administrative staff and begin simplifying its food and beverage menu in early March. In a message to employees on Monday, February 24, CEO Brian Niccol announced the elimination of 1,100 filled positions as well as "several hundred" others currently vacant worldwide.

This reduction will not affect employees - called baristas - of the 40,576 cafes in Starbucks' global network, 53% of which are owned by the company. As of September 29, 2024, it employed 361,000 people, including 16,000 in support functions (administrative, distribution, production, roasting, storage), according to its annual report, which does not specify the number of administrative staff only. "We are simplifying our structure, removing layers and duplication, and forming smaller, more agile teams," explained Brian Niccol, who took over at Starbucks on September 9 .

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The group had announced on August 13 the surprise departure of Laxman Narasimhan, who had held the position for only 16 months. Brian Niccol intends to return to Starbucks' origins to renew growth, through a business plan called "Back to Starbucks" aimed at a "radical" change in strategy. In the first quarter of its staggered fiscal year, its global sales fell by 4% due to a 6% drop in the number of transactions, partially offset by a 3% increase in the average ticket.

Brian Niccol has already taken many steps, such as eliminating the surcharge for alternatives to cow's milk, bringing back the self-service stand for sugar and some spices like cinnamon, and putting the customer's name on the drinks ordered. He also announced in late January an "optimization" of menus in the coming months, with a reduction of about 30% of the choices of drinks and food in the United States by the end of September.

According to information published Monday on the Starbucks website, this will begin on March 4 with the elimination of "less popular" drinks such as variations of the Frappuccino, the Royal English Breakfast Latte and the White Hot Chocolate. "These items are rarely purchased, can be complex to make or are similar to other drinks on our menu," the group justified. The goal is to simplify the reading of menus for customers, to improve the quality and consistency of the taste of the drinks and also to reduce wait times to "four minutes maximum in most cafes."