Starbucks plans to lay off over 1,000 employees globally as its CEO Brian Niccol is looking to streamline operations, while also simplifying its menu by cutting less popular drinks starting March 4 to focus on fewer, and more popular items.

Niccol, in his letter to employees, said the company would disclose more details about the current layoff later, adding Starbucks would also close several hundred open and unfilled positions.

Niccol said his intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration. 

He had already hinted about the current layoff in January 2025, saying it would be announced by early March. Niccol mentioned that the company needed to reduce work complexity to get better results. 

“Our size and structure can slow us down, with too many layers, managers of small teams and roles focused primarily on coordinating work,” said Niccol. 

Meanwhile, Starbucks has 16,000 employees worldwide, but all of them would not be impacted by the move. For instance, Baristas in its stores, that make up most of the company’s 361,000 employees worldwide would not be included in the current layoff.

‘Simplifying menu for a better experience’

Starbucks has also announced to drop "less popular beverages" from its menu starting March 4, marking a significant change in its strategy to streamline operations and drive sales. 

“We will remove a selection of less popular beverages from our menu, including several Frappuccino® blended beverages, Royal English Breakfast Latte and White-Hot Chocolate. These items aren’t commonly purchased, can be complex to make, or are like other beverages on our menu,” it said.

The move would not only help reduce waiting times but also make way for innovation. It will also improve quality and consistency, the popular coffee chain said.

Additional menu cut on cards

The coffee chain further announced that more beverages and food would exit Starbucks menu throughout the coming months, resulting in about 30% reduction of its menu items by the end of fiscal year 2025 in the US, to make way for other new items.

The beverages that were dropped from the menu were chosen based on three criteria - low customer demand, complexity in their preparation, or similarity to other existing more popular drinks.

While some drinks are being dropped from the menu, Starbucks has announced plans to bring back "beloved" Lavender beverages and introduce a new Iced Cherry Chai and Jalapeño Chicken Pocket in the spring.

“We’re focusing on premium beverages rooted in customer trends and preferences,” it said. Last month, it has introduced the Cortado, a bold yet balanced espresso beverage, which has already performed beyond our expectations, the coffee chain said.

Season of corporate layoffs

Starbucks’ layoff is coming at a time when major companies across the world are announcing similar moves. Just last week, Southwest Airlines announced cutting down 1,750 jobs, or 15% of its workforce, in the first major layoffs in its 53-year history. NASA also announced to cut 2,000 jobs amid workforce reduction. JPMorgan Chase started a fresh round of layoffs, likely to affect about 1,000 employees. 

The layoff list is long and includes the name of major companies like Amazon, Meta, Infosys, Workday, and Salesforce, that have recently announced corporate layoffs.