Dive Brief:
- Starbucks is cutting 1,100 non-retail workers and several hundred open positions across its support partner roles, according to a statement issued by CEO Brian Niccol on Monday.
- The company will inform terminated employees by midday Tuesday, and the coffee giant is in the process of notifying affected workers about the compensation, healthcare benefits and “career transition services” it will provide.
- The layoffs were first mentioned in January as a way to increase the company’s operating efficiency under its “Back to Starbucks” plan.
Dive Insight:
Niccol wrote Monday that the cuts “are simplifying our structure, removing layers and duplication and creating smaller, more nimble teams,” and that the changes to corporate structure would reduce complexity and increase accountability.
According to Starbucks’ most recent 10-K, it employs about 16,000 global workers in “corporate support, store development, roasting, manufacturing, warehousing, and distribution operations.” Starbucks layoffs constitute at least a 6.9% reduction in its global non-retail workforce.The layoffs likely impact a much higher proportion of its support workforce, though the company didn’t clarify what fraction of its non-retail workforce are employed in corporate support. The company employs about 345,000 hourly global retail workers, who weren’t impacted by the job cuts.
For leadership, North American executives at the vice president level or above will need to be present in office in Seattle or Toronto, Canada, three times a week. This does not change the company’s existing remote work policies, according to Niccol’s statement, and those employed at the level of director or below will retain remote status. However, “hiring for future roles will require partners to be Seattle or Toronto based, except for enterprise designated remote positions,” he said.
Starbucks will continue to hire for “priority positions” that back its new support structure and add capability and capacity as needed, Niccol said.
Starbucks’ job cuts and increased emphasis on in-person work come at a moment when many restaurant brands are shedding jobs and rolling back remote work options. Last week, Bloomin’ Brands let go of 17% of its support center workforce. Denny’s said earlier this month that it had undertaken corporate layoffs, but offered few details. At the start of February, Dine Brands terminated about 9% of its corporate workforce. Yum Brands, meanwhile, is shifting KFC’s headquarters to Texas, a move that requires the relocation of about 90 remote workers in addition to employees who had worked in-office in Kentucky.
Such changes are part of a broader shift away from remote work across corporate America and the public sector. On Jan. 20, the Trump Administration ordered federal agencies to return to in-person work “as soon as practicable.”
