Starbucks begins laying off hundreds, closing some regional US offices
The world’s most popular coffee enterprise is laying off 300 U.S. corporate employees in its regional support offices as it attempts to return to “sustainable, profitable growth,” the company announced early Friday.
The company said it is consolidating some US regional support offices, closing some, including those in Atlanta, Burbank, Chicago and Dallas.
The company said it is also reviewing its international support organizations and expects to cut more jobs outside the U.S.
The company said the move is part of an ongoing effort to “sharpen focus, prioritize work, reduce complexity and reduce costs.” It said they would not affect its coffeehouses.
Starbucks’ costs have risen in recent quarters as CEO Brian Niccol has pursued a turnaround strategy focused on the coffeehouse floor, including a heavy investment in additional barista staffing.
Executives last month hailed it as a milestone in the transformation as the company reported its strongest sales growth in more than two years, although operating profit margins have fallen by nearly half since the changes began in late 2023.
The company said it expected to pay about $120 million in severance benefits to laid-off employees.
It also said it was reducing the book value of certain real estate by $280 million, primarily related to its Reserve and Roastery locations, as well as certain non-retail support facilities.
Starbucks announced last month that it is investing $100 million to expand its presence in the Southeast, including the establishment of a new support office in Nashville, Tennessee, where it said it expects to host 2,000 employees over the next five years.
If certain cost-cutting goals are met by 2027 under an incentive plan approved by the company’s board last summer, Starbucks’ top executives will each receive $6 million in awards.
Starbucks employees have gone through several rounds of layoffs since the changes began, including 1,100 corporate layoffs announced in February last year.
