Starbucks to cut corporate staff as it shakes up its organization

  • Starbucks is about to make "significant changes" to its organizational structure that could include corporate layoffs.
  • The changes to the company's leadership are set to begin this week and continue into November.
A Starbucks barista fulfills an order in a South Philadelphia store.
Mark Makela | Reuters
A Starbucks barista fulfills an order in a South Philadelphia store.

Starbucks is about to make "significant changes" to its organizational structure that could include corporate layoffs, according to an internal memo sent to employees by CEO Kevin Johnson.

"We must increase the velocity of innovation that is relevant to our customers, inspires our partners, and is meaningful to our business," Johnson said in a memo obtained by CNBC. "To accomplish this, we are going to make some significant changes to how we work as leaders in all areas of the company."

Johnson said that the executive leadership team is working with supervisors to find ways of innovating faster in a new retail environment. While some roles will be consolidated, others will be shifted, and there will be some non-retail layoffs, a source familiar with the plan told CNBC.

The changes to the company are set to begin this week and continue into November. News of the layoffs were first reported by Bloomberg.

"Change can be difficult, but our culture and our legacy are built on continuing to challenge the status quo," Johnson said.

Starbucks has been struggling with weak sales in the U.S. for several quarters. Its hope was that offering more cold beverages and new lunch items would draw people into its cafes. However, the coffee giant has also had to scale back its store growth and close a number of underperforming company-owned cafes in densely populated areas. Starbucks usually closes about 50 stores annually, but expects to close about 150 next year.

The company also plans to reduce the number of new licensed stores in 2019 by about 100 stores.

Starbucks declined to comment.

Shares of the company were down more than 1 percent Monday.