Starbucks axes 1,100 jobs in bid for US turnaround

Starbucks has announced it will lay off 1,100 employees in the United States and streamline its menu, aiming to improve its declining performance in its home market. This move reflects the company's proactive response to current business challenges, striving to enhance overall competitiveness through operational optimization. The company hopes these changes will revitalize the brand and improve customer satisfaction.

The first menu items to be removed include the Royal English Breakfast Latte, White Hot Chocolate, and several blended Frappuccinos. Starbucks plans to reduce its menu by nearly a third in the coming year, hoping to reduce customer wait times and improve product quality and consistency. The company believes that streamlining the menu will help improve efficiency and better meet the core needs of customers, enhancing their overall experience.

Starbucks stated that the drinks being removed "are not purchased frequently, have complex preparation processes, or are similar to other drinks on the menu." The menu changes will take effect on March 4th. The company emphasizes that streamlining the menu is to focus on more popular items and present them with excellent quality, while freeing up space for innovation and staying consistent with its core positioning as a coffee company. This strategic shift aims to reinforce Starbucks' identity as a premier coffee destination.

The layoffs are primarily concentrated in corporate "support partner" roles and will not affect store-level positions or investments. The company stated that it would notify affected employees by noon on Tuesday and eliminate "hundreds" of open positions. CEO Brian Niccol said in a statement, "Our goal is to improve operational efficiency, strengthen accountability, reduce complexity, and drive better integration." These measures are designed to streamline operations and improve the company's financial performance.

Starbucks' brand in the U.S. market has faced some challenges in recent years, including customer complaints about long wait times and high prices, as well as employee attempts to form unions. In addition, the company has been embroiled in controversy over the Israel-Gaza war, facing boycott calls from both pro-Israel and pro-Palestinian camps, despite the company's efforts to remain neutral. This simplification of the menu marks a shift in Starbucks' strategy, which previously emphasized personalized drinks, and aims to address these challenges head-on.