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Starbucks Cuts 1,000 Jobs and Trims Menu to Boost Sales

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Starbucks announced on Monday it will lay off over 1,000 corporate employees and eliminate complex and unpopular drinks from its menu in an effort to reverse declining sales and revitalize the coffee chain. The company is simplifying operations by cutting 30% of its menu, including Frappuccino blended drinks, Royal English Breakfast Latte, and White Hot Chocolate.

Streamlining the Menu

Starbucks explained that the removed items were either infrequently purchased, difficult to make, or too similar to other menu options. The company has already removed iced energy drinks and controversial olive oil coffees. The decision follows a broader trend among retailers and restaurants to reduce costs by focusing on their most profitable products.

“These items aren’t commonly purchased, can be complex to make, or are like other beverages on our menu,” Starbucks said in a release.

Corporate Layoffs and Structural Changes

Alongside the menu changes, Starbucks is cutting approximately 1,100 corporate jobs and eliminating several hundred open but unfilled positions. Additionally, the company now requires vice president-level employees and above to work from its Seattle or Toronto offices at least three times a week.

Challenges and Strategic Shifts

Starbucks has faced declining sales for four consecutive quarters due to high prices, long wait times, and increasing unionization among its workforce. More than 30% of Starbucks orders are placed via mobile apps, creating operational challenges during peak hours. The company’s new CEO, Brian Niccol, is leading a turnaround effort to address these issues.

Brian Niccol’s Vision for Starbucks

Brought in from Chipotle in August 2024, Brian Niccol is Starbucks’ fourth CEO in two years. He aims to return the chain to its roots as a “community coffeehouse” rather than a fast-paced to-go operation. Niccol, known as a “Mr. Fix-It” in the industry, has reintroduced traditional elements like barista-doodled cups and self-serve milk and sugar stations to restore the brand’s “soul.”

Niccol noted in a recent interview that Starbucks’ heavy focus on mobile orders “took a lot of the soul” out of the brand, and his strategy emphasizes creating a welcoming environment with comfortable seating for community gatherings.

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