Starbucks has announced plans to lay off approximately 1,100 corporate employees, representing about 7% of its non-retail workforce, as part of a strategic effort to streamline operations amid declining sales.

The layoffs, effective immediately, will not impact in-store staff or employees involved in warehousing, manufacturing, distribution, and roasting operations.

This decision comes under the leadership of CEO Brian Niccol, who assumed his role in September 2024.

Niccol aims to simplify the company’s structure, enhance efficiency, and improve accountability.

In addition to the layoffs, Starbucks will eliminate several hundred open positions and plans to remove 13 underperforming drinks from its menu starting March 4, with a goal to reduce the menu by 30% by September.

The focus will shift towards premium beverages and the reintroduction of popular seasonal items.

The company has faced a series of sales challenges, with global same-store sales declining 7% in the fourth quarter of fiscal year 2024, driven by an 8% decrease in comparable transactions.

Despite these setbacks, Starbucks’ shares experienced a slight uptick of 1.1% following the announcement of the layoffs.

As part of the restructuring, affected employees will receive pay and benefits until May 2, followed by severance packages based on tenure.

The company is also emphasizing in-office presence, requiring vice presidents and higher-level executives to work from Seattle or Toronto offices at least three days a week.

However, Niccol has faced criticism for commuting from California using a corporate jet, despite the emphasis on in-office work.

This move aligns Starbucks with other major companies implementing cost-cutting measures in response to economic pressures.

The company operates over 21,000 stores globally, employing approximately 361,000 individuals, with 16,000 in corporate support roles.