As a part of the company’s turnaround plan, Starbucks is downsizing its corporate workforce by 1,100 jobs. About 7% of the company’s global corporate employees have been impacted, while roles in warehousing, manufacturing, and store operations are exempt from the effects. Since most of Starbucks’ global workforce is cafe-based, it hasn’t revealed the precise number of corporate employees.
New CEO Brian Niccol, who joined in September as the company’s sales dropped, revealed the restructuring plan earlier this year. All the affected employees will be informed on Tuesday and will keep on receiving pay and benefits until May 2, and then severance packages will begin based on tenure and career transition support.
This restructuring is consistent with other large companies removing middle management, similar to Southwest Airlines, which not too long ago announced a 15 percent cut to its corporate staff. Despite the job cuts, Starbucks shares opened a little higher, maintaining a 17% year-to-date gain that closely tracks the S&P 500 Index.
The company that has 211,000 people in the U.S. and 95% of them working in its more than 10,000 stores is concentrating on eliminating duplicate roles and enhancing productivity. The alterations shall not affect cafe workers, or those in warehousing and roasting facilities.
Also, there is a change in the return-to-office policy of Starbucks. The new policy requires vice presidents and above to work from the Seattle or Toronto offices three days a week, while directors and lower-level employees can still work remotely. But, for future hires, these cities will be mostly where these employees will be based.
Some internal backlash over his own travel perks hasn’t stopped Niccol from making rapid decisions to improve customer experience, like restoring condiment bars and enforcing stricter in-store policies. The CEO is determined to remake Starbucks for long-term growth.
