SEATTLE — The email landed in inboxes on the morning of May 15, and by midday, employees at Starbucks’ regional offices were packing up desks that no longer had a home. The company told workers it would cut about 300 U.S. corporate jobs and close several regional offices, the latest in a series of reductions under Chief Executive Brian Niccol.
Starbucks said the moves would generate roughly $400 million in restructuring charges, including severance payments and asset write-downs. The company framed the cuts as part of its effort to reduce costs and get back to growth, a goal that has proved elusive since Niccol arrived in September 2024 with a turnaround plan called “Back to Starbucks.”
The plan was meant to be simple: make the stores feel like cafes again, speed up service, and win back customers who had drifted to cheaper and faster competitors. Niccol promised to rebuild the company around its baristas and its stores, cutting discounts, simplifying the menu, and investing in the equipment that keeps lines moving.
Two years in, the results have been mixed. U.S. traffic has improved in fits and starts, but sales growth remains well below the levels Starbucks delivered in the years before the pandemic. Store visits are still recovering from the mobile-order congestion that overwhelmed counters, and customers have shown they are sensitive to price. The company has responded with occasional promotions, a step that management once said it wanted to avoid.
The job cuts announced Thursday are aimed at the layers of corporate bureaucracy that Niccol has described as slow and redundant. Starbucks has already trimmed its corporate ranks in earlier rounds of restructuring, and the latest reduction targets support functions — real estate, marketing, finance, human resources — that have little direct contact with customers.
“We are simplifying how we work,” the company said in a statement. “Decisions should be made closer to the stores.”
Employees affected by the cuts were told they would receive severance and career-transition support, according to people familiar with the process. The company also said it would close several regional offices, consolidating teams into its Seattle headquarters and a smaller number of locations. Starbucks declined to name the offices being closed.
The $400 million charge will weigh on the company’s current-quarter results, and management has warned investors that restructuring expenses will continue as the plan unfolds. Analysts said the cuts could help Starbucks reach its margin targets, but they cautioned that cost reductions alone will not fix the underlying problem: getting customers to buy more coffee.
“Starbucks has a traffic problem, not a cost problem,” one analyst said. “Layoffs can protect the numbers for a quarter or two, but the growth story has to come from the stores.”
The pressure on Niccol is real. Starbucks’ stock has been volatile since he took over, and investors have grown impatient with a turnaround that has moved more slowly than the company’s own guidance suggested. Same-store sales in the U.S. have been uneven, and the company’s business in China — once its fastest-growing market — has been squeezed by competition from local chains offering cheaper drinks and faster delivery.
The company has responded by opening fewer new stores in China and leaning on its U.S. business for growth. It has also leaned on its drive-through lanes, which now account for a large share of U.S. sales, and on a growing pipeline of new drinks. But baristas and store managers say the pressure to hit speed targets has made the job harder, and union organizers have used the tension to press for better pay and schedules.
Starbucks has fought the unionization push in U.S. stores, and the corporate layoffs are unlikely to change that dynamic. If anything, workers’ groups said the cuts show that the company is willing to take a hard line on costs while its stores remain short-staffed during peak hours.
Niccol, for his part, has argued that the turnaround requires painful steps now to avoid bigger problems later. The company’s board has backed him, and investors have generally accepted the logic: cut costs, simplify the business, and reinvest the savings in stores and technology. Whether that formula produces growth is the question that will define his tenure.
The 300 jobs being cut are a small fraction of Starbucks’ global workforce of more than 350,000 people, most of whom work in stores. But the symbolic weight is larger. Starbucks built its brand on the idea that it treats employees — “partners,” in company language — as more than a cost line. Every round of corporate layoffs tests that story.
For now, the company is moving ahead. Regional offices will close over the coming months, and affected employees will leave in waves. The $400 million charge will show up in the books. And the stores, as always, will keep opening at 5 a.m. The question is whether the customers will keep coming.
