Starbucks (SBUX) announced it will eliminate about 7% of corporate jobs as CEO Brian Niccol focuses on the company's turnaround plan.

In a letter obtained by Yahoo Finance sent to employees on Monday, Niccol shared that the company plans to eliminate 1,100 support roles and several hundred additional open and unfilled positions globally. 

The memo said employees will be notified by Tuesday, Feb. 25. Niccol said the layoffs are meant to simplify the company's structure while "removing layers and duplication and creating smaller, more nimble teams." 

He added, "Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration. All with the goal of being more focused and able to drive greater impact on our priorities." 

Laid-off employees will receive a "comprehensive severance package," Niccol said. According to sources close to the matter, that includes current pay and benefits until at least May 2. Additionally, employees will be eligible for severance based on how long they've been with the company, six months of healthcare coverage through COBRA assistance, and one-on-one career coaching.

As of last September, Starbucks employed around 361,000 workers globally and 211,000 in the US. A majority of staff are in-store employees who will not be impacted by this layoff. Employees who work in roasting, manufacturing, warehousing, and distribution operations will also not be impacted.

Rather, the layoff will affect those in Starbucks' 16,000 corporate support roles.

Cheng Xin via Getty Images

In the letter, Niccol also asked North American leaders at the vice president level and higher to report in person to offices in Seattle for US employees and Toronto for Canadian employees "at least three days a week." 

He added that Starbucks will not change its hybrid work policies for existing employees, but the policy will change for future employees.

"Generally, partners working remotely in director and below roles today will keep their remote status," Niccol wrote. "Hiring for future roles will require partners to be Seattle or Toronto based, except for enterprise designated remote positions."

The restructuring announcement comes after the Seattle-based coffee giant beat low earnings expectations for its first quarter under Niccol's leadership. Niccol took the helm on Sept. 9 and implemented a "Back to Starbucks" plan, which calls for a focus on core coffee products, better pricing, and faster service.

"The first quarter in 2025 results met our expectations, clearly show[ed] some signs of progress ... we still have much work to do," Niccol told investors on the earnings call.

Revenue was flat year over year while earnings per share of $0.69 dropped 23% compared to the same quarter a year ago. The company alluded to "heightened investments" for Niccol's turnaround plan as part of the reason for the earnings decline.

Global same-store sales and foot traffic declined 4% and 6%, respectively, marking the fourth straight quarter of declines. 

Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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