Tag: layoffs

Starbucks Restructuring: 300 Layoffs in $400 Million Cost Cut

Posted on by Qahwa World
Author: Qahwa World – Dubai
Date: May 16, 2026

Executive Summary

  • Starbucks will lay off approximately 300 US-based employees as part of a major restructuring.
  • The total restructuring cost is $400 million, including $120 million for severance payments.
  • Starbucks will close regional offices in Atlanta, Burbank, Chicago, and Dallas.
  • The company is reviewing its international support structure, with more job cuts expected outside the US.
  • Coffeehouse operations will not be affected by these changes.
  • Starbucks recently reported its strongest sales growth in over two years, despite operating profit margins nearly halving since late 2024.
  • Top executives could receive $6 million each if specific cost-cutting targets are met by 2027.

Job reductions and office closures

Starbucks is trimming its workforce once again. The coffee giant will lay off about 300 US-based roles as part of a restructuring aimed at achieving “durable, profitable growth.” According to Reuters, the job reductions will affect regional support offices.

The company will consolidate its US office network and close several locations. These include offices in Atlanta, Burbank, Chicago, and Dallas. Starbucks confirmed that the changes will not impact its coffeehouse operations.

Restructuring costs and financial impact

Starbucks estimates it will spend about $120 million on severance payments linked to this layoff round. The company will also take a $280 million reduction in the book value of selected real estate assets. These assets are largely tied to its reserve and roastery sites, as well as certain non-retail support properties.

Operating profit margins have nearly halved since late 2024. However, Starbucks recently reported its strongest sales growth in more than two years. Executives described this as a milestone in the company’s turnaround strategy.

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Item Amount (million $) Notes
Severance payments 120 For 300 laid-off workers
Real estate asset writedown 280 Reserve, roastery, support properties
Total 400 Full restructuring cost

New investment and Southeast expansion

At the same time, Starbucks announced plans last month to invest $100 million to expand its presence in the US Southeast. The plan includes a new support office in Nashville, Tennessee. This office is expected to accommodate around 2,000 employees over the next five years.

The company is cutting costs in some regions while investing in others. This balanced approach reflects Starbucks’ effort to improve efficiency without abandoning growth opportunities.

Executive incentives and continued cost-cutting

Starbucks’ board linked executive incentives to the company’s cost strategy. Last summer, the board approved a plan that could give top executives $6 million each if they meet specific cost-cutting targets by 2027.

The May 2026 layoffs add to a series of workforce reductions since the turnaround began. In February last year, Starbucks eliminated 1,100 corporate positions. The company is now reviewing its international support structure and expects additional job cuts outside the United States.

Frequently Asked Questions (FAQ)

1. How many employees is Starbucks laying off in this round?

Starbucks is laying off approximately 300 US-based employees. The cuts affect regional support offices, not coffeehouse operations.

2. What is the total cost of this restructuring?

The total cost is about $400 million. This includes $120 million for severance payments and $280 million for real estate asset writedowns.

3. Will Starbucks coffeehouses be affected by these changes?

No. The company confirmed that coffeehouse operations will not be impacted. The changes are limited to support and administrative structures.

4. Are there expected layoffs outside the United States?

Yes. Starbucks is reviewing its international support structure and expects additional job cuts outside the US, though specific numbers have not been disclosed.

5. What is the executive incentive linked to cost cutting?

Top executives could receive up to $6 million each if they achieve specific cost-cutting targets set by the board, with a deadline of 2027.

6. Is this the first layoff under the current turnaround plan?

No. In February 2025, Starbucks eliminated 1,100 corporate positions. The May 2026 layoffs are part of the ongoing cost-reduction strategy.

Author: Qahwa World – Dubai |
Publication date: May 16, 2026

Nestlé to Reduce Workforce as Part of Cost-Saving Drive

Posted on by Qahwa World

Dubai – Qahwa World

Nestlé, the Swiss multinational food and beverage corporation, has revealed plans to cut roughly 6% of its global workforce over the next two years as part of a broad efficiency initiative.

Under new CEO Philipp Navratil, the company aims to eliminate about 16,000 positions. Of these, around 12,000 will be in corporate and administrative roles, while the remaining 4,000 will affect manufacturing, logistics, and supply-chain operations.

The job cuts respond to persistent cost pressures and two consecutive quarters of revenue decline. In the first nine months of 2025, Nestlé’s sales fell by 1.9% year-on-year to CHF 65.9 billion ($76.8 billion). Nonetheless, the company credited its coffee and confectionery divisions—underpinned by price increases—for delivering solid growth.

Navratil is pushing to expand Nestlé’s cost-savings target from CHF 2.5 billion to CHF 3 billion by the end of 2027. He described the cuts as “hard but necessary,” noting that while Nestlé’s size offers advantages, it also brings complexity and inefficiencies that must be addressed.

According to the company, the planned reductions in corporate staffing are expected to yield approximately CHF 1 billion in annual savings. Efficiency drives in the production and supply chain segments are intended to support further cost mitigation through automation and operational consolidation.

While Nestlé’s nutrition segment and operations in China were among the weaker performers, the coffee segment showed resilience—even as commodity prices remained elevated and consumer spending softened in many markets.

In particular, the company implemented an average price increase of 7.4% across key coffee and confectionery brands such as Nescafé and Nespresso—moves that helped support growth across all regions. Nestlé also reported strong momentum in its ready-to-drink and coffee concentrate lines, especially in Asian and Oceanic markets.

The decision to downsize globally underscores the intense cost pressures faced by one of the world’s largest food and beverage companies. Even strong-performing sectors like coffee could not completely offset rising production and raw-material expenses, particularly for green coffee and cocoa.

In the coffee commodities market, both Arabica and Robusta prices remain at historically high levels. In September 2025, Arabica futures exceeded $4 per pound for the first time since April, while Robusta prices hovered near $5,694 per tonne—strained by adverse weather, reduced yields in Brazil and Vietnam, and continued supply chain disruptions.

Starbucks to Close Hundreds of Stores and Cut Thousands of Jobs in a $1bn Austerity Plan

Posted on by Qahwa World

Starbucks is preparing to write off $1bn in costs and assets by closing hundreds of stores in North America and making further corporate layoffs.

Between June and the end of September, 400 US and Canada stores deemed unprofitable and unsuitable for refurbishment were closed or slated for closure. US store managers will find out this week if their outlet has been added to the list, extending cuts that have so far focused on takeaway-only stores.

However, in an open letter to employees, Starbucks CEO Brian Niccol announced that hundreds more sit-in stores deemed unsuitable for refurbishment under the Back to Starbucks strategy would also close. Starbucks has sought to move away from “overly transactional” takeaway stores and focus on longer dwell-time visits and more personalised service as part of a major strategy to reverse faltering sales in the US.

“We have identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed,” Niccol said in his letter.

Niccol forecasts that Starbucks will end its fiscal year with nearly 18,300 company-operated and licensed stores across North America, down from 18,734 at the end of its third quarter ended 30 June 2025. The Seattle-based coffee chain, which has posted six consecutive quarters of like-for-like sales decline in the US, plans to return to positive outlet growth across North America next year, as well as modernise more than 1,000 US stores — 10% of its company-owned US locations.

Niccol has also announced further layoffs, just seven months after announcing plans to cut 1,100 corporate jobs across its global business. Approximately 900 non-retail roles will be axed as the coffee chain seeks to prioritise investment in retail operations.

“These steps are to reinforce what we see is working and prioritise our resources against them. We will continue to carefully manage costs and stay focused on the key areas that drive long-term growth,” Niccol added.

In a separate SEC filing, Starbucks said $450m of the total $1bn costs will be allocated to exiting leases early, with a further $400m on the disposal of company-operated store assets. The remaining $150m will be allocated to severance and staff support packages.

In July 2025, Starbucks reported 2% year-on-year net revenue growth in North America to reach $6.9bn. However, the coffee chain saw third quarter like-for-like sales and comparable transactions both declined.