[Starbucks Cafe. Photo Credit to Pxhere]

Starbucks, one of the world's most renowned coffee chains, has announced major organizational changes and menu adjustments in an effort to raise their underwhelming sales.

The company decided to lay off over 1,000 corporate employees, and cut unpopular drinks including some of the Frappuccino blended drinks, Royal English Breakfast Latte, and White Hot Chocolate. 

Starbucks’ sales have been on a decline for the past year, particularly in the United States, their biggest and most important market.

The reasons for the decline have been attributed to the high prices and wait times, as the company struggled to unionize.

This series of challenges has led to Starbucks facing growing pressure from labor unions, with thousands of baristas pushing for better wages and working conditions.

The company has also faced boycott calls following their altercation in debates over the Israel-Gaza war, despite their best efforts to remain neutral.

These factors have led to a downturn in sales, prompting the company to take a number of decisive measures.

The company revealed that their transactions at U.S. stores were down by 8% in the most recent quarter compared to the same period in the previous year.

The company is attempting to turn their fortunes around under the new CEO Brian Niccol.

Niccol, an American businessman, was recruited from Chipotle in August 2024 and became the company’s fourth CEO in just two years. 

Niccol, known for revamping struggling chains, has stated his goal is to return the company to its roots as a community coffeehouse, rather than focusing on personalized drinks.

His drastic measure started with the company’s announcement that they would be cutting around 1,100 jobs.

On the dismissals, Niccol explained, “Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration.”

Starbucks also confirmed that in addition to the layoffs, several hundred unfilled corporate positions will remain vacant. 

The majority of the employees subject to dismissal are set to receive notifications by the end of February.

The restructuring aims to support the company’s long-term growth plan by allowing Starbucks to invest resources into other facets such as technology and customer support.

In his message, Niccol emphasized that the company remains committed to its baristas and store managers who interact with customers constantly.

Alongside the corporate shake-up, Starbucks is making bold changes to its menu, reducing its offerings by 30%. 

The move, set to take effect in early March, is part of an initiative to simplify operations and accelerate drink preparation for its baristas.

The beverages set to disappear include the Iced Matcha Lemonade, Espresso Frappuccino, and White Hot Chocolate. 

Starbucks noted that while these drinks have a loyal fanbase, they are less popular compared to other drinks.

The two big changes come as Starbucks attempts to navigate the rapidly shifting coffee industry with increasing competition. 

However, despite these challenges, Starbucks remains a dominant force in the global coffee market, with over 40,000 locations worldwide. 

The company’s latest moves signal a clear intent to modernize its operations and streamline both its corporate structure and customer experience.

Analysts have mentioned that while layoffs and menu changes may initially spark backlash, these steps could position Starbucks for sustained growth by focusing on innovation and efficiency.

As the March menu revamp approaches, customers will be watching closely to see how the iconic coffee chain adapts following its latest transformation.