Starbucks Layoffs: Coffee Chain To Cut 5 Percent Of Corporate Staff

Starbucks (SBUX) has plans to cut 5 percent of its corporate workforce, or about 350 non-retail employees, who work in areas like technology, creative, marketing and store development, according to the Wall Street Journal.

Chief executive Kevin Johnson on Tuesday sent a company memo about the staffing changes which "came as a result of work that has been eliminated, deprioritized or shifting way of working within the company."

The layoffs were not unexpected, as Johnson in September wrote in a different memo: "We must increase the velocity of innovation that is relevant to our customers, inspires our partners, and is meaningful to our business. To accomplish this, we are going to make some significant changes to how we work as leaders in all areas of the company."



The Journal noted that Starbucks has struggled "to attract new and repeat customers to its U.S. coffee shops."

The coffeehouse chain has approximately 277,000 employees, according to Forbes. Most of the layoffs are reportedly taking place in Seattle, the company's headquarters.

According to the Seattle Times, a laid-off employee said the company gave her an hour to turn in company equipment and leave the building.

Declining sales have the company considering some other changes. Starbucks could potentially close 150 stores next year, when the typical store closure count in a year — when there are closures — is about 50.

Additionally, the number of newly licensed stores in 2019 might be restricted to 100.

Domestically, the company is looking at menu changes. Internationally, Starbucks may expand the number of its stores in China.

In its fourth-quarter earnings, Starbucks reported record revenue of $6.3 billion.