Starbucks CEO Brian Niccol wants corporate employees to work harder and take accountability for the coffee giant’s financial health.

Speaking to staff in Seattle in his first address since announcing layoffs last month, Niccol pointed out that inefficiencies in the company’s operations and decision-making processes have contributed to recent struggles. “We’re not effective,” he said.

The layoffs, he explained, were necessary to address these issues, as the Wall Street Journal (NWSA) first reported. A Starbucks (SBUX) spokesperson later confirmed the details in response to a request for comment from Quartz.

Niccol’s tough love approach isn’t new for Starbucks staff. In Oct. 2024, employees were told they must work at least three three days a week in the office or leave.

Now, with four consecutive quarters of declining sales, Starbucks is continuing to navigate a “Big Fix.” But the company’s ability to capture market share has been further hampered by inflation, which has made consumers more cautious about their spending.

As part of his plan to restore the brand’s momentum and return to its roots, Niccol has unveiled the extensive “Back to Starbucks” strategy. The sweeping operational shifts include making fresh-brewed coffee in under four minutes, cutting the menu by 30%, bringing back condiment bars, and limiting mobile orders to 12 items per customer. Other initiatives include reintroducing ceramic mugs, ramping up TV ads, and hiring more baristas. Recently, Starbucks also cut 13 drinks from the menu in favor of better-selling items.

This overhaul comes at a critical time, with Starbucks facing heightened competition in it’s second-largest market, China. There, it competes with local brands like Luckin’ Coffee (LKNCY) and fast-growing $1 bubble tea giant, Mixue Group.

Not all of Niccol’s changes have been well-received. The company’s reversal of its 2018 open-door policy, which allowed customers to sit and use the bathrooms, has sparked backlash. The policy was implemented after a 2018 arrest of two black men at a Philadelphia location. However, Niccol has made it clear that the company prefers to close locations than reverse its stance.

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