Starbucks is set to lay off approximately 1,100 corporate employees, a significant restructuring move as part of its strategy to streamline operations. Announced by CEO Brian Niccol in a letter to staff, the layoffs come as the company seeks to alleviate operational inefficiencies amid declining sales and increasing competition.

In a memo, Niccol stated that impacted employees will be notified by midday Tuesday, and the company will also eliminate several hundred open positions. “Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration,” he emphasized, echoing similar sentiments from other reports.

Currently, Starbucks employs about 16,000 corporate support staff worldwide, but the cuts will not affect baristas or retail employees, who make up the bulk of the company’s workforce of approximately 361,000. The layoffs target around 7% of corporate jobs, reflecting a broader initiative to enhance operational agility.

The expected impact of this decision is rooted in persistent challenges facing the coffee chain, including dips in global same-store sales, which fell 4% in the first quarter of fiscal year 2025. Customers have expressed dissatisfaction with rising prices and longer wait times in stores, particularly in the U.S. According to The New York Times, Starbucks has moved to cut menu items and eliminate unnecessary complexity within its organizational structure as part of a broader strategy to rejuvenate its customer experience.

This restructuring strategy is reminiscent of moves made by other corporations facing market challenges; for instance, Southwest Airlines recently announced 1,750 job cuts. Niccol, who succeeded former CEO Kevin Johnson, was brought on board to turn around sluggish sales and restore Starbucks to its original community-focused model.

Starbucks has experienced mixed results, with stock prices rising slightly following recent operational changes, such as eliminating extra charges for non-dairy milk. Despite the hurdles the company faces, leaders remain optimistic that these layoffs will pave the way for a more streamlined and effective operation.

For more detailed insights on the implications of these layoffs, follow the discussion on Newsweek and HuffPost.