Major Chain Lays Off 1,100 Employees as Sales Struggles Continue
Starbucks is forging ahead with plans to rejuvenate the brand with news 1,100 corporate employees are to be let go amidst poor sales and a drop in profit. CEO Brian Niccol announced the layoffs to workers via a note on Monday, telling them the move was designed to "operate more efficiently" and "reduce complexity", according to The New York Times. The layoffs will impact 7% of the Starbucks' 16,000 employees but will not affect the company's baristas. "We believe it's a necessary change to position Starbucks for future success," Niccol said in his letter.
"We are simplifying our structure, removing layers and duplication and creating smaller, more nimble teams. Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration."
All Part of the "Back to Starbucks" Plan
Niccol is focused on his big 'Back to Starbucks' plan to save the iconic coffee chain, recently closing down 12 underperforming locations as part of the company's back to basics approach. "I've spent my first several weeks in stores engaging with and listening to feedback from our partners and customers. It's clear that Starbucks is a much-loved brand," Niccols said after taking over as CEO. "We need to focus on what has always set us apart — a welcoming coffeehouse where people gather and where we serve the finest coffee, handcrafted by our skilled baristas. We are energized and the team is already moving quickly."
In upcoming changes that will have more of an impact on customers, the Starbucks menu is being "optimized" and several items will be retired starting March 4, 2025. "Additional beverages and food will exit Starbucks menu throughout the coming months, resulting in a roughly 30% reduction of menu items in the U.S. by the end of fiscal year 2025 (Sept. 2025), to make way for innovation," Starbucks told Eat This, Not That! in a statement.
"We're focusing on premium beverages rooted in customer trends and preferences. For example, in January, we introduced the Cortado, which has which has already performed beyond our expectations. And this spring, we're excited to bring back the beloved Lavender beverages and will also introduce a new Iced Cherry Chai and Jalapeño Chicken Pocket."
New Menu Items
So is your favorite drink getting pulled off the menu? Here's exactly what's being removed, and what Starbucks recommends you have instead:
OUT: Iced Matcha Lemonade
TRY: We recommend trying the Green Tea Lemonade, which shares similar citrus and grassy notes.
OUT: Espresso Frappuccino, Caffè Vanilla Frappuccino
TRY: The Coffee Frappuccino is a great alternative, as it has sweet, roasty coffee notes and can easily be customized to add a shot of espresso or pump of syrup.
OUT: Java Chip Frappuccino, White Chocolate Mocha Frappuccino
TRY: Try the Mocha Frappuccino instead as it has bittersweet chocolate notes, and the chocolate bits in the Mocha Cookie Crumble Frappuccino give a similar texture as the Java Chip Frappuccino.
OUT: Chai Crème Frappuccino, Caramel Ribbon Crunch Crème Frappuccino, Double Chocolaty Chip Crème Frappuccino, Chocolate Cookie Crumble Crème Frappuccino, and White Chocolate Crème Frappuccino
TRY: For customers who like the Creme Frappuccino beverages, they might enjoy the creamy vanilla notes of the popular Vanilla Bean Frappuccino which can be customized with flavor, or the Strawberry Frappuccino which has notes of fresh berries and cream.
OUT: White Hot Chocolate
TRY: The Hot Chocolate can be customized with Mocha or White Chocolate Mocha sauce.
OUT: Royal English Breakfast Latte
TRY: The London Fog Latte shares similar sweet floral notes.
OUT: Honey Almondmilk Flat White
TRY: The Flat White can be customized with any non-dairy milk and sweetener of choice.
Niccol is confident this strategy will yield results. "We're on track to turn the business around," he said on a January earnings call. "But much of our work is just beginning."
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