Starbucks Cuts 5% of Corporate Workers
Starbucks Cuts 5% of Corporate Workers in Moves to Lift Profit
(Bloomberg) -- Starbucks Corp., on a mission to boost profit and appease apprehensive investors, is dismissing about 5 percent of its non-restaurant workers.
The company said it’s laying off about 350 corporate employees, most of whom work in its Seattle headquarters. Starbucks had said in September that an unspecified number of job cuts were coming. The coffee chain is restructuring to speed innovation and pump slowing sales.
“Today will be a difficult day for all of us,” Chief Executive Officer Kevin Johnson said in an internal email to employees viewed by Bloomberg News. “As we continue evolving our core areas of marketing, creative, product, technology and store development, we are making some significant changes to these areas, as well as other functions across our global business.”
The coffee company earlier this month reported comparable sales that topped estimates in its latest quarter as it works to bring new menu items to stores faster. The chain has been facing more pressure this year to show it can still grow, especially in its home market, where Americans increasingly are looking for healthier options. Johnson also has been shaking up management, bringing in former Hyatt Hotels Corp. executive Patrick Grismer as chief financial officer.
So far, the changes are helping the stock, which is up about 18 percent this year. There’s room for further growth, according to billionaire Bill Ackman, who in October disclosed a $900 million stake and said he’s betting the shares could double in the next three years.
Starbucks is making changes abroad, too. In October, the company said it would trim its European corporate operations and turn over certain markets to longtime Latin American licensee Alsea SAB. The move, coupled with the restructuring in the U.S., may help remove distractions from management.
“Every single decision was made after very careful consideration and reviewed with leaders across the company,” Johnson said in the email. “They came as a result of work that has been eliminated, de-prioritized or shifting ways of working within the company.”
To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net
To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Kevin Miller, Jonathan Roeder
©2018 Bloomberg L.P.