In a sweeping effort to revitalize its business, Starbucks revealed plans on Monday to lay off over 1,000 corporate employees and streamline its menu offerings amid declining sales.
The coffee giant will remove several beverages from its menu, including select Frappuccino blended drinks, Royal English Breakfast Latte, and White Hot Chocolate. The company aims to cut 30% of its menu items, focusing on drinks that are complex to prepare or less popular among customers.
The restructuring comes as Starbucks faces its longest sales decline in years, with four consecutive quarters of decreased revenue. Customer complaints about high prices and extended wait times have impacted store traffic, while unionization efforts have highlighted concerns about working conditions.
Under new CEO Brian Niccol, who joined from Chipotle in August 2024, Starbucks is working to recapture its original identity as a community gathering space. The company plans to shift away from its heavy focus on mobile ordering, which currently accounts for over 30% of sales and has created operational challenges during peak hours.
The workforce reduction includes approximately 1,100 corporate positions and the elimination of several hundred unfilled roles. Additionally, vice president-level executives and above will be required to work from offices in Seattle or Toronto at least three days per week.
Niccol, recognized for his ability to turn around struggling chains, has already implemented changes to restore traditional elements of the Starbucks experience, including the return of barista cup art and self-service stations for milk and sugar.
This strategic overhaul represents Starbucks' most comprehensive attempt to address operational inefficiencies and rebuild customer connections in recent years. The company had previously removed its iced energy drinks and olive oil coffees from the menu as part of its simplification efforts.