Starbucks Plans to Cut Corporate Staff in Restructuring

Starbucks plans job cuts this fall at its Seattle headquarters, including eliminating some top executives, as it reorganizes in a bid to make quicker decisions and reignite sales growth in an evolving retail landscape. The restructuring is the latest bump in a turbulent year for the coffee giant, which has seen high-profile departures, an embarrassing turn in the national spotlight after a racially charged arrest, and lackluster sales growth in important markets. CEO Kevin Johnson, a veteran of several corporate shake-ups while at Microsoft, told employees in a memo this past week that while the company is making progress on its priorities, including faster growth in the United States and China and increased returns to shareholders, more needs to be done.

Total Retail's Take: This represents the first reorganization during Johnson's tenure. He took over as CEO from Howard Schultz in 2017. While certainly not a dire situation, Johnson recognizes that Starbucks is seeing its rate of growth slip, and he's looking for ways to reverse that trend. Earlier this year, Starbucks announced that it was lowering its profit forecast for 2018 amid slowing sales growth at its U.S. stores. In addition to the forthcoming job cuts, Starbucks previously announced that it would be closing 150 stores in 2019. Johnson has big shoes to fill in replacing Schultz, and he's being proactive in rightsizing Starbucks to ensure future growth. Furthermore, Starbucks has targeted China as a leading growth market for its business, and has partnered with e-commerce giant Alibaba for a delivery service in the country. We'll see the impact these moves have on driving Starbucks toward sustained profitable growth.