Feb. 24, 2025 "Starbucks lays off 1,100 corporate employees as coffee chain streamlines": Today I found this article on BNN Bloomberg:
In a letter to employees released Monday, Niccol said the company will inform employees who are being laid off by mid-day Tuesday. Niccol said Starbucks is also eliminating several hundred open and unfilled positions.
“Our intent is to
operate more efficiently,
increase accountability,
reduce complexity
and drive better integration,”
Niccol wrote in the letter.
Starbucks has 16,000 corporate support employees worldwide,
but that includes some employees who aren’t impacted, like roasting and warehouse staff.
Baristas in the company’s stores are not included in the layoffs.
Niccol said in January that corporate layoffs would be announced by early March. He said all work must be overseen by someone who can make decisions while the the Seattle coffee giant
reduces the complexity of its structure
and eliminates silos within the company that slow communication.
“Our size and structure can slow us down,
with too many layers,
managers of small teams
and roles focused primarily on coordinating work,”
Niccol wrote.
Starbucks hired Niccol last fall to turn around sluggish sales.
He has said he wants to improve service times — especially during the morning rush
— and reestablish stores as community gathering places.
Niccol is also cutting items from Starbucks' menu and experimenting with its ordering algorithms to better handle its mix of
mobile,
drive-thru
and in-store orders.
Starbucks' global same-store sales, or sales at locations open at least a year, fell 2% in its 2024 fiscal year, which ended Sept. 29.
In the U.S., customers tired of price increases and growing wait times.
In China, its second-largest market, Starbucks faced growing competition from cheaper rivals.
However, in its most recent quarter, the company topped most sales expectations and Niccol changes that were visible to customers, such as the decision to stop charging extra for non-dairy milk and a streamlining of the menu,
boosted store traffic
and improved service.
Starbucks shares rose less than 2% Monday.
---
Dee-ann Durbin, The Associated Press
Apr. 29, 2025 "Starbucks says turnaround on track as sales decline persists": Today I found this article on BNN Bloomberg:
Same-store sales declined 1 per cent in the quarter ended March 30, according to a statement Tuesday, falling short of the average estimate of analysts polled by Bloomberg. Earnings per share also missed expectations.
The shares slipped 1 per cent at 4:14 p.m. in extended trading in New York. The stock has declined 7 per cent so far this year through Tuesday’s close, slightly more than the drop of the S&P 500 Index over the same period.
Starbucks is working to revive sales growth after
price increases,
long lines
and boycotts related to the company’s perceived stance on war in the Middle East turned customers away.
The company is also contending with Americans’ increasingly bleak outlook on the economy, which also contributed to weak results at Chipotle Mexican Grill Inc.
Under Chief Executive Officer Brian Niccol, who started in September, Starbucks kicked off an overhaul of its cafes to make them more welcoming.
It’s also working to speed up service by
adding more workers to stores
and rolling out an algorithm to prioritize which orders to prepare,
among other initiatives.
“Our financial results don’t yet reflect our progress, but we have real momentum with our ‘Back to Starbucks’ plan,” Niccol said in remarks released alongside the earnings report, adding “we know we will return the business to growth.”
Analysts had lowered their expectations for same-store sales ahead of the earnings report, according to data compiled by Bloomberg.
Third-party sources, including Placer.ai’s mobility data, suggest that visits to Starbucks slipped in the first three months of 2025 from a year ago.
Analysts also factored in how costs related to the company’s corporate restructuring would hit profits, as well as spending tied to the turnaround efforts.
The comparable-sales results represents an improvement from the company’s previous quarter, when the measure fell 4 per cent. It’s the fifth consecutive decline.
In North America, the company’s biggest market, a decline in transactions drove a deeper-than-expected comparable sales decline. The international business performed better, with comparable sales rising 2 per cent. China was also a bright spot, with flat sales coming in better than expected and improving markedly from the prior quarter.
Daniela Sirtori, Bloomberg News
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