Food & Beverage

Starbucks to cut 5% of its corporate workforce

Key Points
  •  Starbucks is laying off 5 percent of its corporate workforce, according to a memo obtained by CNBC.
  • The coffee giant had previously indicated it would cut non-retail employees as it shakes up its organizational structure.
  • CEO Kevin Johnson says impacted employees were in roles connected to work that had been "eliminated" or "deprioritized" in Starbucks' streamlining efforts.
Starbucks CEO Kevin Johnson 
VCG | Getty Images

Starbucks is planning to cut approximately 5 percent of its global corporate workforce, according to a memo sent by CEO Kevin Johnson on Tuesday.

About 350 employees in marketing, creative, product, technology and store development will be impacted, Johnson said in the memo obtained by CNBC.

Johnson said affected divisions will undergo "significant changes" as Starbucks narrows its priorities and aims to become a more nimble company. While the decisions were "incredibly difficult," he said they were made after "very careful consideration." Johnson said impacted roles were related to work that had been "eliminated" or "deprioritized."

The Wall Street Journal first reported the layoffs.

The news comes after Starbucks said in September it would cut corporate staff as it shuffles its organizational structure.

Starbucks has been plagued with lagging U.S. sales for several quarters. The coffee giant has scaled back on store growth and closed underperforming company-owned locations.

How a long term stake in Starbucks coffee paid off
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While the company still sees positive same-store sales, investors have been looking for a faster pace of sales growth. As Starbucks executes its plan, its results have improved.

Chief Operating Officer Roz Brewer previously told CNBC that Starbucks shifted a number of "remedial tasks" that baristas were doing during the day to after closing, giving them more time to work with customers. By streamlining some of these operations, Starbucks aims to encourage customers to spend more time in its locations.

In its fiscal fourth quarter, Starbucks said sales in the U.S. and Americas that had been open for at least a year grew 4 percent. That topped Wall Street expectations for growth of about 2.7 percent.

Johnson said it was the company's strongest same-store-sales growth in the U.S. in five quarters.

Starbucks said its loyalty program grew 15 percent year over year, hitting 15.3 million members. The company said Starbucks Rewards members drove nearly 40 percent of sales in the U.S.

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