Starbucks CEO Brian Niccol says the company’s app needs to be more transparent when it comes to pricing.
Global coffee chain Starbucks will cut jobs as its CEO Brian Niccol continues to implement changes to support lagging sales and improve profitability.
Niccol made the announcement via an employee notice that was also posted on the Starbucks website.
He highlighted how the company intends to implement its “Return to Starbucks” strategy, a series of changes announced last year that aim to improve customers’ in-store experience, but also said it needs to strive for greater efficiency, which would ultimately lead to layoffs.
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“We have recently begun to define the supporting organization for the future. We are approaching this work thoughtfully, but it will involve difficult decisions and choices. I expect, unfortunately, some job cuts and smaller support teams in the future,” Nicol wrote.
People walk past a Starbucks coffee shop in Manhattan, New York, United States, January 15, 2025. (Mostafa Bassim/Anadolu via Getty Images / Getty Images)
“This work will not affect our in-store teams or the investments we are making in store opening hours. We will communicate the changes by early March.”
He said he does not make such decisions lightly and wants to be transparent about his plans to ensure employees are informed directly by him. It is unclear how many people will be released.
Niccol, who took over as CEO in September, stressed the need for the company to return to its coffee roots.
The “Back to Starbucks” strategy aims to bring back some of the things that made the company the most recognizable coffee brand in the world.
This includes bringing condiment bars back to stores and enhancing the cafe’s aesthetic with personal touches, like serving coffee in ceramic mugs.
Brian Niccol, CEO of Starbucks, pictured in 2015 (Photo by Robin Marchant/Getty Images / Getty Images)
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Starbucks is also reintroducing the use of Sharpies to write customers’ names on cups and will stop charging extra for customizing drinks containing plant-based milk.
The company also set a target of a four-minute waiting time in cafes and provided additional coverage hours in more than 3,000 stores.
Earlier this month, the company said it would only welcome paying customers to exit and use restrooms in its stores. This decision was made to prioritize paying customers who want to sit and enjoy its cafes.
Starting this spring, the company will double paid parental leave benefits for its workers. The company previously offered six weeks of paid time off for parental leave.
Among its latest goals to create a positive work culture, the company has also committed to filling 90% of retail leadership roles internally, to ensure employees stay longer and grow within the company. the company. It also continues to cover 100% of tuition for thousands of employees through its Starbucks College Achievement Plan and offer company stock to eligible partners.
“We still have a lot of work to do, but I am pleased with the progress we have made and appreciate how everyone has rallied behind the plan,” Niccol wrote to workers.
The Starbucks coffee cup is seen in this illustrative photo taken at the cafe in Manama, Bahrain, on March 5, 2024. (Jakub Porzycki/NurPhoto via Getty Images / Getty Images)
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Before Niccol took office, the company faced increasing pressure from union organizing drives across the country and consecutive disappointing fiscal quarters as traffic declined. Niccol, who replaced former CEO Laxman Narasimhan in August, is trying to increase profitability and create a better environment for workers.
Niccol has also faced employee strikes at hundreds of stores across the country.
Daniella Genovese of Fox Business contributed to this report.
