Starbucks initiates hundreds of layoffs as it closes some regional US offices

Starbucks initiates hundreds of layoffs as it closes some regional US offices

The world's most popular coffee venture is laying off ‌300 U.S. corporate employees in its regional support offices as it seeks to return to "durable, profitable growth," the company announced early Friday.

The company said it is consolidating some U.S. regional support offices, ​closing some, including those in Atlanta, Burbank, Chicago and Dallas. 

The company said ​it is also reviewing its international support organizations and expects more ⁠job cuts outside the U.S.

The company said the moves are part of an ​ongoing effort to "sharpen focus, prioritize work, reduce complexity, and lower costs." It said they ​will not impact its coffeehouses.

Costs have mounted at Starbucks in recent quarters as CEO Brian Niccol pursues a turnaround strategy focused on the coffeehouse floor, which has entailed hefty investments in additional ​barista staffing. 

Executives last month touted what they called a milestone in the ​turnaround as the company posted its strongest sales growth in more than two years, although operating profit ‌margins have ⁠fallen by nearly half since the turnaround began in late 2023.

The company said it expects to pay out about $120 million in severance benefits to terminated employees. 

It also said it is reducing by $280 million the book value of some real estate, primarily ​related to its ​reserve and roastery locations, ⁠as well as some non-retail support facilities.

Starbucks last month announced it was investing $100 million to expand its presence in the Southeast, ​including the establishment of a new support office in Nashville, ​Tennessee, where ⁠it said it expects to host 2,000 employees over the next five years.

Starbucks' top executives stand to gain $6 million each in awards if certain cost-cutting goals are met by ⁠2027 under ​an incentives plan approved by the company's board ​last summer.

Starbucks employees have gone through several rounds of layoffs since the turnaround began, including a layoff of 1,100 ​corporate employees announced in February last year.