Starbucks CEO Brian Niccol says the company’s operating system requires transparency in pricing.
Global coffee giant Starbucks will cut corporate operations as its CEO Brian Niccol continues to make changes to strengthen remaining sales and improve profitability.
Niccol made the announcement in a notice to employees that was also posted on the Starbucks website.
He emphasized how the company intends to deliver its “Back to Starbucks” strategy, a series of changes announced last year aimed at improving the customer experience in the store, but also said that it needs to strive for efficiency, which will eventually have results. in layoffs.
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“We have just begun the work of defining the support organization in the future. We are approaching this work thoughtfully, but it will involve difficult decisions and choices. I expect that, unfortunately, we will have job terminations and small support groups moving forward,” wrote Nicol.
People walk past a Starbucks coffee shop in Manhattan, New York, United States on Jan. 15, 2025. (Mostafa Bassim/Anadolu via Getty Images/Getty Images)
“This move will not affect our retail team or the investment we make during retail. We will communicate the changes in early March.”
He said he does not take such decisions lightly and wants to be open about his plans to ensure that employees hear about the plans directly from him. It is not clear how many people will be released.
Niccol, who took over as CEO in September, stressed the need for the company to return to its roots as a coffee house.
The “Back to Starbucks” strategy aims to bring back some of the things that have made the company the most recognizable coffee brand in the world.
That includes bringing back condiment bars to stores and enhancing the coffeehouse aesthetic with personal touches, such as serving coffee in ceramic mugs.
Starbucks CEO Brian Niccol, pictured in 2015 (Photo by Robin Marchant/Getty Images / Getty Images)
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Starbucks is also introducing the use of Sharpies to write customers’ names on cups and will stop charging extra for customizing drinks with non-dairy milk.
The company has also set itself a four-minute wait time goal at restaurants and has offered additional hours of operation at more than 3,000 stores.
Earlier this month, the company said it would only accept paying customers to use restrooms in its stores. This move is designed to prioritize paying customers who want to stay and enjoy its cafes.
Starting this spring, the company will double its paid parental leave benefits for employees. The company previously offered six weeks of paid parental leave.
Among its latest goals to create a positive work culture, the company has also committed to filling 90% of sales leadership roles internally, to ensure that employees stay longer and grow with the company. It also continues to pay 100% of the college tuition of thousands of employees as part of the Starbucks College Success Program and to award company stock to qualified associates.
“We still have a lot of work to do but I’m happy with the progress we’ve made and I appreciate the way everyone has worked on this project,” Niccol wrote to staff.
A cup of Starbucks coffee is seen in this photo taken at a cafe in Manama, Bahrain on March 5, 2024 (Jakub Porzycki/NurPhoto via Getty Images/Getty Images)
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Before Niccol took over, the company faced increasing pressure from unionization campaigns across the country and a series of disappointing financial positions as traffic declined. Niccol, who replaced former CEO Laxman Narasimhan in August, is trying to increase profits and create a better environment for employees.
Niccol also dealt with striking workers in hundreds of stores across the country.
Fox Business’ Daniella Genovese contributed to this report.
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