Starbucks is laying off workers and paring back the menu as it tries to turn the business around
Starbucks announced Monday it will lay off over 1,000 corporate workers and cut complex and unpopular drinks from its menu in an effort to turn around lagging sales and revamp the coffee chain.
Starbucks is cutting some Frappuccino blended drinks, Royal English Breakfast Latte and White Hot Chocolate as part of its effort to simplify operations and shrink its menu.
'These items aren't commonly purchased, can be complex to make, or are like other beverages on our menu,' the company said in a release announcing the menu change.
Starbucks is cutting 30% of its menu in an effort to simplify its processes. Starbucks' iced energy drinks and its controversial olive oil coffees have already been removed from menus. Other retailers and restaurants are also cutting choices to reduce costs and focus on selling their most profitable items.
Starbucks' sales have slipped for four straight quarters, the longest decline in years. Some customers stopped going to Starbucks because of high prices for drinks and long wait times, and hundreds of its stores have voted to unionize in protest of pay, benefits and working conditions. More than 30% of Starbucks' orders now come from customers ordering off their phones and picking them up. This influx of mobile orders has sometimes strained Starbucks workers during rush hours.
Starbucks also said Monday that it's cutting around 1,100 corporate jobs.
The company added that it would be eliminating 'several hundred' open and unfilled positions, as well as requiring those who are at vice president levels or higher to come into its Seattle or Toronto offices at least three times a week.
The company is attempting a turnaround under new CEO Brian Niccol.
Niccol, who was brought in from Chipotle in August 2024 and is the company's fourth CEO in two years, has embarked on an ambitious turnaround plan for the coffee chain. Niccol said in a recent interview that Starbucks had veered too much into mobile orders and that it 'took a lot of the soul' out of the brand.
He has aimed to return the company to its roots as a 'community coffeehouse' with comfortable seating, rather than one focused on getting customers out the door as fast as possible with to-go orders.
Niccol – known in the industry as a 'Mr. Fix-It' for struggling chains – has also brought back a company tradition of baristas doodling on cups, as well as self-serve milk and sugar stations.
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