Starbucks Corporation is taking decisive steps to revive its U.S. market presence by cutting 1,100 corporate jobs and simplifying its menu offerings. The Seattle-based coffee giant announced that the job cuts will focus on corporate "support partner" roles, sparing store-level positions and investments. This strategic move, set to take effect on March 4, aims to reduce wait times and improve service quality, addressing growing customer dissatisfaction.
The company's decision to streamline operations includes the elimination of "several hundred" open and unfilled positions. Initial menu changes will see the removal of items such as the Royal English Breakfast Latte, White Hot Chocolate, and several blended frappuccinos. Starbucks plans to shrink its menu by nearly a third over the next year, targeting items that are either infrequently purchased or complex to prepare.
"We're simplifying our menu to focus on fewer, more popular items, executed with excellence."
- Starbucks
Starbucks' restructuring efforts come amidst a backdrop of declining sales in its most critical market. The company has faced persistent challenges, with transactions at U.S. stores open at least a year down by 8% in the most recent quarter compared to the previous year. The brand has been plagued by customer complaints about long wait times and high prices, which have eroded its reputation.
"This will make way for innovation, help reduce wait times, improve quality and consistency, and align with our core identity as a coffee company."
- Starbucks
Chief Executive Brian Niccol, who joined the company last year, is spearheading these initiatives to rejuvenate Starbucks' performance in the U.S. market. Niccol's strategy emphasizes operational efficiency and better integration within the company.
"Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration."
- Mr. Niccol
Starbucks employs over 360,000 individuals globally and operates or licenses more than 40,000 stores worldwide. While the U.S. remains its most significant market, the company's recent challenges highlight the need for transformational changes to regain its stronghold.
Employees affected by the corporate restructuring will receive notifications by mid-day on Tuesday. The company remains committed to maintaining its workforce at the store level while focusing on enhancing customer experience through a more streamlined menu.