Starbucks planning a restructuring

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Starbucks is reportedly planning an organisational restructuring which will include leadership changes and a series of layoffs in the weeks ahead as the company makes “significant changes.” Bloomberg reported yesterday that Starbucks CEO, Kevin Johnson sent a memo to headquarters employees last week which states that leadership recently met for a “transparent discussion” about the company’s next phase of growth. The memo begins with six paragraphs pointing out the company’s history of innovation and strong brand. It eventually implies that layoffs and restructuring are to be expected.A company spokeswoman confirmed this to Reuters, saying there “will be some job losses, some role expansions, and redeployments,” .

This year, Starbucks has been closing underperforming stores at a greater rate than in the past — it usually closes c. 50 stores p.a. but this year will close 150. The company, which recently also reported 3Q18 results, has been experiencing lacklustre sales growth in some of its most important markets. It’s unknown exactly how many employees will be impacted by the Starbucks layoffs although Reuters writes that retail employees will not be affected, but will instead focus on other aspects of the business.

In June, Starbucks long-time CEO Howard Schultz (who led the company for decades) departed stoking investor concerns on how the firm would evolve after nearly 40 years of Schultz’s being at the helm.

 

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