Starbucks will eliminate 1,100 jobs and simplify its menu, cutting underperforming drinks and aiming to restore its core identity as a coffee house, amidst declining sales and operational challenges.
**Starbucks Restructures to Revive Sales Amid Declining Performance**
**Starbucks Restructures to Revive Sales Amid Declining Performance**
In a significant move to boost its struggling business, Starbucks is slashing its menu and workforce in the US, focusing on efficiency and customer satisfaction.
In a strategic effort to address ongoing sales declines and improve customer experience, Starbucks is planning to cut approximately 1,100 jobs along with a substantial number of menu items in the US. This decision comes as part of a broader initiative led by CEO Brian Niccol, who was appointed last year to spearhead a turnaround in the company's performance.
The coffee giant has identified several drinks, including the Royal English Breakfast Latte and White Hot Chocolate, for elimination. Starbucks plans to reduce its menu offerings by nearly one-third over the year, a move intended to alleviate long customer wait times and enhance product quality. The company stated that the drinks targeted for removal were either rarely ordered, complicated to prepare, or too similar to other items already available.
Starbucks highlighted that these menu changes will take effect on March 4. The company emphasizes that they aim to concentrate on fewer, more popular items, which will allow for better execution and innovation while aligning more closely with its legacy as a cafe centered around coffee.
The job cuts, while significant, are focused on corporate support roles rather than frontline staff, thus sparing the majority of the 360,000 employees and 40,000 stores globally. Starbucks plans to inform affected employees by mid-day Tuesday, and the announcement includes the elimination of several hundred vacant positions as part of an overarching strategy to streamline operations, increase accountability, and integrate services more effectively.
This restructuring attempt comes in the backdrop of Starbucks facing several challenges including reduced customer traffic and rising complaints about service quality, compounded by barista unionization efforts and sensitive political controversies surrounding its involvement in discussions about the Israel-Gaza conflict.
The company reported an 8% decline in transactions at US outlets open for at least a year compared to the previous year, underscoring the urgency of these changes. The reduction of menu complexity marks a departure from previous strategies that focused heavily on custom drinks, indicating a shift back to more traditional offerings in the hopes of capturing customer loyalty once again.
