Starbucks to cut 5% of workforce in restructuring effort
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Coffeehouse chain Starbucks will lay off about 5 percent of its global workforce, or roughly 350 employees, as it restructures its business to address pressing needs in a tough sales environment.
The cuts will affect nonretail employees on Starbucks’ marketing, creative, technology and store development teams, with most of the layoffs occurring at its corporate headquarters in Seattle. The company began to inform affected employees on Tuesday.
“Every single decision was made after very careful consideration and reviewed with leaders across the company,” Starbucks CEO Kevin Johnson said in an internal memo reviewed by FOX Business. “And while incredibly difficult, they came as a result of work that has been eliminated, de-prioritized or shifting ways of working within the company.”
Starbucks shares have been under pressure this year amid slowing sales in the key U.S. market. The company has turned to menu innovations and healthier beverage options in a bid to boost store traffic.
The company warned last September that it would lay off some corporate employees in a bid to streamline its operations for its current challenges. Months earlier, Starbucks said it would close 150 under-performing stores in competitive markets in 2018, or about 100 more than its traditional annual rate.
Starbucks sales rebounded in the company’s most recent fiscal quarter, as same-store-sales growth and revenue outpaced Wall Street’s expectations. Company shares have pared earlier losses in 2018 and are now up more than 15 percent so far this year.