Starbucks continues to cut corporate jobs in turnaround bid: ‘Many are cost centers, not revenue producers,’ says expert

Core Insights - Starbucks is undergoing a significant restructuring, including layoffs and changes to its corporate structure, as part of its "Back to Starbucks" strategy to reconnect with customer preferences [1][2][4] Financial Overview - The Starbucks board has approved a $1 billion restructuring plan, with approximately 90% of expenses expected to arise from its North American operations, primarily impacting fiscal 2025 [2] - The plan includes the closure of at least 100 North American cafes and remodeling over 1,000 locations, with an anticipated 1% decline in company-operated store count in North America [3] Operational Changes - Starbucks will eliminate around 900 non-retail partner roles and many open positions, with affected employees being notified and offered severance and support packages [3] - The company aims to focus resources closer to customers to enhance coffeehouse experiences and customer service [4] Market Position - Starbucks has faced six consecutive quarters of declining same-store sales, and its market share among Gen Z has decreased from 67% to 61% over the past two years [5] - The company is shifting away from mobile-only "pickup" stores to recreate a "third place" environment, which was key to its previous popularity [4] Leadership and Strategy - The restructuring is led by CEO Brian Niccol and CFO Cathy Smith, both of whom have prior turnaround experience [8] - Smith plans to implement zero-based budgeting to evaluate costs and improve margins, focusing on labor productivity and corporate spending efficiencies [9]