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5% cut in Starbucks’ corporate workforce

Starbucks to take back the remaining stores in China - Retail in Asia

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


About 350 employees in marketing, creative, product, technology and store development will be impacted, Johnson said.

He added that 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.” The impacted roles were related to work that had been “eliminated” or “deprioritized.”

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.

SEE ALSO : Starbucks and Alibaba Group form strategic partnership in China

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 said 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 with Starbucks Rewards members driving nearly 40 percent of sales in the U.S.

(Source: CNBC)