Starbucks CEO Brian Niccol has called on corporate employees to take “more accountability” and return to office-based working after announcing job cuts to revitalise the company’s operations.
Speaking at an internal forum at the company’s Seattle headquarters, Niccol emphasised the need for efficiency in product delivery, decision-making and mutual responsibility, as reported by The Wall Street Journal.
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“Make no mistake, we’re in a turnaround,” he stated, signalling a critical period for the global coffee chain.
Niccol added: “We have way too many follow-up meetings to fix way too many surprises. We’ve got to stop it.”
The company is implementing a “Back to Starbucks” plan to address declining sales.
This involves becoming a “more versatile and adaptable company” – a move that has led to the dismissal of 1,100 corporate employees and the elimination of hundreds of unfilled positions.
Niccol clarified that the retrenchment exercise is aimed at enhancing efficiency rather than cost savings and that no additional redundancies are planned.
He also said that office-based working will boost performance.
Under the plan, North American vice-presidents and above have to work from Seattle or Toronto at least three days a week, with future director-level hires also based there, except for remote roles.
40% of its North American workforce is currently working remotely.
Starbucks’ comeback strategy focuses on reviving its coffeehouse culture with enhanced food offerings.
Employees now serve drinks in mugs or glasses for eat-in customers, provide a condiment bar and personalise cups with messages.
The company also updated its conduct policy, requiring guests to make a purchase to remain inside or use the restroom.
Addressing mobile ordering challenges, Starbucks is overhauling its in-store operations and technology.
Initiatives such as the “Siren System” are being deployed to enhance efficiency at high-volume stores, with a focus on reducing order congestion and achieving a service time of four minutes.
Adjustments to staffing and training are also underway to better manage peak periods, and pricing changes such as removing surcharges for non-dairy milk are being introduced to attract customers.
Starbucks will also reduce its menu range by 30%, phasing out less popular or complex items and introducing new products such as the Cortado, the Iced Cherry Chai and the Jalapeño Chicken Pocket.
In the first quarter of the fiscal year 2025, Starbucks generated net revenue of $9.39bn, down from $9.42bn in the same quarter of the previous year.
Net earnings for the quarter ended 29 December 2024 stood at $780.8m, a 23.8% decline from $1.02bn a year previously.
