Looks like Starbucks CEO Brian Niccol is bringing his old Chipotle playbook to the world’s most famous coffee chain—and step one is getting rid of some middle-management dead weight. In short, Starbucks announced that it’s cutting jobs in its corporate support roles as part of Niccol’s “Back to Starbucks” plan. And while no blue hair baristas will be harmed in the making of this restructuring, the folks in Seattle’s glass towers might be #OpentoWork on LinkedIn soon.

(Source: Giphy) 

In a letter to employees, Niccol laid out the usual buzzwords about “efficiency” and “reducing complexity” while admitting that Starbucks has gotten a little bloated with “too many layers” and “managers of small teams.” Translation:  If your job involves writing reports about other people’s reports, then you’re about to be yeeted. The layoffs, which will hit by early March, are aimed at simplifying the company’s structure and cutting down on silos. 

Now is this really surprising? Hell no. Starbucks could use a little streamlining, especially as the brand has been struggling to caffeinate its bottom line after a rough year of disappointing sales. U.S. customers are tightening their wallets, China’s flocking to cheaper rivals, and Starbucks stock is barely up 5% over the past year—meanwhile, the S&P 500 is up 24.28%. 

(Source: Yahoo Finance) 

Which is why the layoffs will primarily hit Starbucks’ corporate support roles, which include everything from roasting and warehousing to distribution and store development. So while Niccol hasn’t put an exact number on how many heads are rolling, it’s clear he’s ready to gut the structure if it means squeezing out a few more points of margin. 

Of course, Deutsche Bank’s Lauren Silberman is mainly cheerleading this as the “early innings” of a turnaround, but if this plan doesn’t translate into same-store sales growth or a decent foothold in China, Niccol’s going to have some explaining to do. And by “explaining,” I mean groveling.

(Source: AP News) 

The other issue is that Starbucks is a 53-year-old company trying to act like it’s still got the swagger of a startup. It’s the granddad who shows up at the family barbecue in Yeezys, hoping no one notices his knee brace. Niccol’s trying to strip it down to something leaner, faster, and more relevant, but that’s a tough sell for a company whose entire identity is built on slow mornings and overpriced coffee.

However, while this move might make sense on analysts' spreadsheets, it’s also a risk of alienating a corporate culture that’s been deeply ingrained in Starbucks’ DNA for decades. You can’t just gut the boardroom and expect the stock price to magically shoot up. But then again, if you’re Elliot Management, maybe you can. 

(Source: Giphy) 

For now, it’s clear Niccol is banking on his no-nonsense approach to revive the company back to what it used to be. But it’s no doubt a gamble. If he pulls it off, he’ll be the guy who saved Starbucks from becoming a relic of its own success. If he doesn’t? Well, he’s already yanked the companies 2025 fiscal guidance, so if this doesn’t get investors horned up with bigly returns in 2025—Niccol may be finding himself #OpentoWork in the near future. 

In the meantime, keep a close eye on the impact of this restructuring and place your bets accordingly. As always, stay safe and stay frosty, friends! Until next time…

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Stocks.News holds positions in Starbucks as mentioned in the article.