Starbucks preparing for layoffs at Seattle headquarters

Seattle coffee giant Starbucks could be looking at a series of layoffs in the weeks ahead as the company makes some “significant changes.”

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Starbucks CEO Kevin Johnson sent a memo to headquarters employees last week. It states that leadership recently met for a “transparent discussion” about the company’s next phase of growth. The memo begins with six paragraphs pointing out the company’s history of innovation and strong brand. It eventually implies that layoffs and restructuring are to be expected.

…we are going to make some significant changes to how we work as leaders in all areas of the company and how functional groups are structured to support our retail stores. Put directly, starting next week and into mid-November there will be leadership shifts and non-retail partner impacts as we evolve the direction of teams across the organization in size, scope and goals. In all cases, my commitment to you will be these decisions, while difficult, will be made through the lens of Our Mission and Values.

Johnson notes that “change can be difficult.” Much of these changes are aimed at knocking down “barriers” to decision making and speeding up the process of innovation, according to the memo. The Seattle Times reports that this will include eliminating some top executive positions and shifts. It is unknown exactly how many positions may be cut, or how many people will be laid off. Starbucks’ Seattle headquarters has about 5,000 employees.

This year, Starbucks has been closing under-performing stores at a greater rate than in the past — it usually closes about 50 stores annually; this year it will close 150. The company recently reported its third quarter earnings, which were up 11 percent from the previous year — net revenues of $6.3 billion. But the Times notes that the company has experienced “lackluster sales growth in important markets.”

The news comes nearly four months after Howard Schultz stepped down. Schultz led the company to worldwide domination over the past few decades.

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