Starbucks CEO Brian Niccol has delivered a blunt message to corporate staff — work harder, take ownership, and get back to the office if the company is going to recover.
In his first employee address since announcing 1,100 corporate job cuts last month, Niccol told workers on Tuesday Starbucks needs clearer accountability from leaders to reverse its sales slump.
Speaking at Starbucks’s Seattle headquarters, he said:
“We’re not effective at getting things to stores, and we’re not effective at making and enforcing decisions,” Niccol said at Starbucks’s Seattle headquarters.
“That’s why these changes had to happen.”
The remarks, replayed internally, were reviewed by The Wall Street Journal.
A Business in Decline
Starbucks has reported declining same-store sales for four consecutive quarters, as customers increasingly turn to cheaper or faster options.
The layoffs, which cut 612 jobs tied to the Seattle office, are part of Niccol’s push to overhaul operations.
The CEO said Tuesday that Starbucks’s US stores are already improving through steps like bringing back self-serve condiment stations and reintroducing ceramic cups. But those are minor fixes — deeper change is needed at corporate level, he said.
“Make no mistake, we’re in a turnaround,” Niccol told staff.
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No Further Layoffs Planned — For Now
Niccol stressed the job cuts were not just about saving money and said there are currently no plans for more layoffs.
But with ongoing sales declines, he warned the company must improve to avoid further reductions.
More employees returning to offices in the US and Canada will help that process, Niccol said. Currently, about 40% of Starbucks’s North American corporate staff work remotely.
He said:
“We need to untangle a few things right now.
“But these are things we can fix.”
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Winning Back Customers
Niccol said Starbucks must become more selective about the initiatives it pushes to stores — focusing on what customers actually want.
Financial pressures on consumers are rising, meaning Starbucks has to work harder to earn their loyalty.
Even small details matter, Niccol said.
That includes ensuring electrical outlets work for customers who want to stay and work in cafes, and responding faster to complaints about everything from furniture to drink order backups.
He said:
“We have too many follow-up meetings to fix too many surprises.
“We’ve got to stop it.”
Starbucks will outline its revamped leadership structure later this month. Niccol will also face investors next week in his first shareholder meeting since becoming CEO in September.
