Starbucks Plans Major Restructuring: Reducing US Support Roles and Closing Regional Offices

Leading coffee retailer Starbucks recently announced a significant restructuring of its organization, including the reduction of about 300 U.S. support roles and the closure of some regional support offices.

Starbucks’ New Strategy

A Starbucks spokesperson explained the company’s new direction, “We are taking further action under the Back to Starbucks strategy, building on our strong business momentum and working to return the company to durable, profitable growth.”

Job Cuts and Role Eliminations

Approximately 300 U.S. support roles are being eliminated as part of this restructuring plan. The aim is to reduce complexity and lower costs, according to the company spokesperson.

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International Support and Regional Offices

Starbucks is also reviewing its international support organization with expectant role impacts outside the U.S. In addition, some regional support offices are being closed as part of the company’s real estate streamlining initiative.

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Impact on Profits and Costs

Operating profit margins have seen a decrease as Starbucks CEO Brian Niccol implements the Back to Starbucks strategy. This turnaround effort has led to significant investments in additional barista staffing, despite seeing the strongest sales growth in over two years. The company expects to pay out around $120 million in severance benefits to affected employees.

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Starbucks Stock Information

The restructuring plan also includes a decrease of $280 million in book value of some real estate, particularly relating to its reserve and roastery locations, along with some non-retail support facilities.

Reuters contributed to this report.