Starbucks Announces Major Job Cuts and Menu Simplification to Boost U.S. Sales

Facing decreased sales and customer dissatisfaction, Starbucks is implementing substantial changes to streamline operations, including job reductions and a simplified menu focused on popular items.

Starbucks is set to make significant adjustments in its U.S. operations, announcing the elimination of 1,100 jobs as part of a broader strategy to revitalize flagging sales. The company is also streamlining its menu, aiming to reduce offerings by 30% over the next year. Initial cuts will include beverages such as the Royal English Breakfast Latte and White Hot Chocolate, with more items expected to follow, as the chain seeks to enhance service speed and product quality.

Brian Niccol, the company’s chief executive who previously led Chipotle, has been tasked with spearheading this turnaround effort. He has emphasized a need to return to the brand’s core identity as a coffee house, stating that the culled items were either infrequently ordered, complicated to prepare, or redundant. This overhaul will take effect on March 4.

Starbucks confirmed that the job cuts will primarily target corporate roles and will not extend to in-store employees, with notifications to affected staff planned for Tuesday noon. Additionally, the company will eliminate several hundred open positions to enhance operational efficiency and accountability.

With more than 360,000 employees globally and over 40,000 stores, the U.S. market remains crucial for Starbucks. However, the brand has faced challenges, including customer complaints regarding prolonged wait times and pricing, coupled with issues related to barista unionization efforts. Compounding these difficulties, the company has found itself at the center of contentious debates surrounding the Israel-Gaza conflict, prompting calls for boycotts from various factions.

Recent reports indicated a concerning 8% drop in transactions at U.S. stores open for at least a year, which is spurring these significant operational changes. Starbucks' renewed focus on a streamlined menu marks a departure from prior tactics that emphasized custom beverage offerings, signaling a new direction aimed at regaining customer loyalty.