Starbucks has announced the elimination of 1,100 corporate positions as part of a broader restructuring effort under CEO Brian Niccol, Reuters reported on Monday. The coffee chain is also cutting 13 drinks from its menu beginning March 4, representing the first phase of a plan to reduce its US menu by 30% this year, according to Today.com.
"We are simplifying our structure, removing layers and duplication and creating smaller, more nimble teams," Niccol wrote in a letter to employees. This corporate restructuring comes as the Seattle-based company struggles with declining sales across its major markets.
The menu simplification, as Today.com reported, focuses on eliminating beverages that are ordered less frequently, are complicated to prepare, or closely resemble other offerings. This represents a significant shift in Starbucks' product strategy, which has historically expanded to include an increasingly diverse array of beverage options.
Among the beverages being discontinued are the Iced Matcha Lemonade, Espresso Frappuccino, Caffe Vanilla Frappuccino, and White Mocha Frappuccino. Several Crème Frappuccino variations will also be eliminated, including Chai, Caramel Ribbon Crunch, Double Chocolate Chip, Chocolate Cookie Crumble, and White Chocolate versions. The White Hot Chocolate, Royal English Breakfast Latte, and Honey Almond Milk Flat White are also being removed from the menu.
Starbucks has suggested alternatives for customers whose favorite drinks are being discontinued. For instance, those who enjoy the Iced Matcha Lemonade can order an Iced Green Tea Lemonade instead. Coffee Frappuccinos with added espresso or syrup can substitute for the Espresso or Caffe Vanilla Frappuccinos.
Niccol joined Starbucks last year when the company's shares had lost 40% of their value from 2021 highs due to weakening demand in both the United States and China. Since his arrival six months ago, the company's stock has rebounded more than 22%, with shares rising nearly 2% during Monday afternoon trading.
The CEO, who previously gained recognition for revitalizing Chipotle Mexican Grill, has implemented what he calls the "Back to Starbucks" plan. This strategy focuses on streamlining business operations while enhancing customer experiences at US locations. "We have to clear the noise out both in food and beverage menus," Niccol said earlier this year, according to People magazine. "That opens the door for better innovation that will hopefully resonate even more so for our customers."
The CEO emphasized that despite the corporate restructuring, the company will "continue to hire for priority positions that fit with our new support structure." He also clarified that the layoffs would not impact in-store teams or investments in store hours. According to its 2024 report, Starbucks currently employs approximately 211,000 people in the United States and roughly 150,000 employees internationally. The scale of this workforce reduction represents a significant organizational change for the global coffee retailer.
While the menu changes have been confirmed for US locations, it remains unclear whether similar cuts will affect international markets, including the United Kingdom. The company has not yet provided details about which corporate divisions will be most affected by the job reductions.
