Overview
Starbucks has announced the reduction of around 300 support roles within the United States and said it is reviewing its international support organization with an expectation that further positions outside the country will be affected. The company described the moves as part of an effort to streamline its real estate footprint and consolidate regional support office space.
Company statement
A Starbucks spokesperson said the company is consolidating U.S. regional support office space and taking additional steps related to leases and lease commitments. The spokesperson added that the review of the international support organization forms part of a broader push to operate as a world-class licensor and will likely result in additional role impacts outside the U.S.
Financial disclosure and charges
In a regulatory filing, Starbucks indicated it will record $400 million in restructuring charges. Of that total, $280 million consists of non-cash charges tied to impairments of long-lived assets, including right-of-use lease assets. These impairments are primarily associated with a reassessment of Starbucks Reserve and Roastery locations and with efforts to optimize non-retail support facilities. The remaining $120 million in cash charges are mainly for employee separation benefits as the company further streamlines its global support organization.
Scope of real estate and office changes
The company said these real estate adjustments and restructuring charges do not relate to its coffeehouse portfolio. Rather, the measures address regional office closures and other changes to non-retail support facilities, according to a person familiar with the matter.
Roles affected by the reductions are reported to be based in Seattle as well as in remote positions across the United States. The impacted functions span several corporate areas, including technology, marketing, finance, and research and development.
Planned changes to the regional corporate office network include closures in Chicago, Atlanta, Dallas, and Burbank, Calif. The company will continue to operate North American regional offices in New York, Toronto, and Coral Gables, Fla., along with its Seattle headquarters and a new corporate hub in Nashville, Tenn. Starbucks is also reviewing its international corporate offices for potential reductions.
Cost targets and executive incentives
Starbucks has set a target to reduce costs by $2 billion by the end of fiscal 2028. The company said these savings are intended to offset substantial investments in its cafe operations. To encourage progress toward the cost-reduction goal, Starbucks is awarding some executives stock bonuses totaling $6 million.
Context from prior actions
In the prior year, Starbucks implemented two rounds of job cuts that removed roughly 2,000 corporate positions and also eliminated hundreds of unfilled roles. During that same period, the company closed hundreds of U.S. stores.
Implications
The announced reductions and the reassessment of office footprints are positioned by the company as measures to better align its support structure and real estate portfolio with its strategic priorities. The stated objective is to achieve structural cost savings while continuing investments in cafe operations.