The global coffeehouse chain Starbucks will be cutting corporate jobs as its CEO Brian Niccol continues to implement changes to bolster lagging sales and improve profitability.
Niccol made the announcement via a notice to employees that was also posted on the Starbucks website.
He highlighted how the company aims to deliver on its “Back to Starbucks” strategy, a series of changes announced last year that aims to enhance customers’ in-store experience, but also said it needs to strive for better efficiency, which will ultimately result in layoffs.
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“We have recently begun the work to define the support organization for the future. We are approaching this work thoughtfully, but it will involve difficult decisions and choices. I expect that, unfortunately, we will have job eliminations and smaller support teams moving forward,” Niccol wrote.
“This work will not affect our in-store teams or the investments we are making in store hours. We will communicate changes by early March.”
He said he does not take such decisions lightly and wanted to be transparent about his plans in order to ensure that employees heard about the plans directly from him. It is unclear how many people will be let go.
Niccol, who took over as CEO in September, has emphasized the need for the company to get back to its roots as a coffee house.
The “Back to Starbucks” strategy aims to bring back some of the things that made the company the most recognizable coffee brand in the world.
That includes bringing back condiment bars to stores and enhancing the coffee house aesthetic with personal touches, such as serving coffee in ceramic mugs.
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Starbucks is also reintroducing the use of Sharpies to write customers’ names on cups and will stop charging extra for customizing beverages with non-dairy milk.
The company has also set a goal of a four-minute wait time in cafés and has provided additional coverage hours in over 3,000 stores.
Earlier this month, the company said it would only welcome paying customers to hang out and utilize the restrooms at its stores. The move was done to prioritize paying customers who want to sit and enjoy its cafés.
Starting this spring, the company will double its paid parental leave benefits for workers. The company previously offered six weeks of paid time off for parental leave.
Among its latest goals to create a positive work culture, the company also committed to filling 90% of retail leadership roles internally, to ensure employees stay longer and grow with the company. It is also continuing to cover 100% of college tuition for thousands of employees as part of its Starbucks College Achievement Plan and offering company stock to eligible partners.
“We have much more work to do but I’m pleased with the progress we’ve made and appreciate how everyone has rallied around the plan,” Niccol wrote to workers.
Before Niccol took over, the company faced growing pressure from unionization campaigns across the nation and back-to-back disappointing fiscal quarters as traffic declined. Niccol, who replaced former CEO Laxman Narasimhan in August, is trying to boost profitability and create a better environment for workers.
Niccol has also faced employees striking at hundreds of stores nationwide.
Fox Business’ Daniella Genovese contributed to this report.
