Starbucks Implements Job Cuts and Menu Simplification for US Revival

The coffee giant is prioritizing operational efficiency and may drop nearly one-third of its offerings to focus on popular items that reflect its core identity.

In a significant move to rescue its declining business in the US, Starbucks is set to cut 1,100 jobs and simplify its menu. The company aims to streamline operations and reduce confusion for customers amid falling sales. As part of this strategy, Starbucks will be removing certain items, including the Royal English Breakfast Latte and White Hot Chocolate, as well as several blended frappuccinos. This initial round of cuts is just a part of a broader plan to decrease the menu size by approximately a third over the coming year.

Starbucks CEO Brian Niccol, who previously led Chipotle, noted that the drinks being eliminated were often not popular, challenging to prepare, or duplicated other offerings. The planned changes will take effect on March 4, with the company's aim to improve wait times, enhance quality, and uphold the brand's identity as a coffee-focused establishment.

The job reductions will focus on corporate roles within the "support partner" sector and will not impact employment levels at outlet locations. Additionally, Starbucks intends to minimize its workforce by eliminating "several hundred" vacant roles as well. Niccol underscored that these steps are targeted at increasing accountability, improving overall efficiency, and fostering better integration within the company.

As the largest player in the coffee market, Starbucks has faced challenges due to rising customer complaints regarding long waits and increasing prices. Furthermore, the company has had to navigate recent controversies surrounding unionization efforts among baristas and its stance during the Israel-Gaza conflict. Recent data indicates that transactions at US stores that have been open for at least a year dropped by 8% in the latest quarter compared to last year.

The new direction towards a simplified menu marks a strategic pivot away from previous emphasis on customization and personalized beverages. This move signifies Starbucks' commitment to restoring customer satisfaction and regaining its footing in the competitive coffee landscape.