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Starbucks CEO Brian Niccol has called on corporate employees to return to the office and take greater accountability for the company’s performance, as the coffee giant works to reverse declining sales.
Speaking in an internal forum at Starbucks’ Seattle headquarters, Niccol said the company needed to streamline decision-making and improve execution to better support its stores. His remarks followed last month’s announcement that 1,100 corporate roles would be eliminated as part of a broader restructuring.
“We’re not effective on how things get to the store, and we’re not effective in making decisions and then holding each other accountable to those decisions,” Niccol said in a replay of the meeting viewed by The Wall Street Journal. “This is why we had to make the changes that we had to make.”
The push for a stronger in-office presence is a key part of Niccol’s turnaround strategy, with roughly 40% of Starbucks’ corporate employees in North America currently working remotely.
A push for in-office collaboration
As part of the company’s restructuring, Starbucks is placing greater emphasis on corporate employees working together in person. Niccol argued that increasing office attendance in the US and Canada would help strengthen operations and allow teams to respond more effectively to challenges.
“We own whether or not this place grows,” he said, stressing that the company must move quickly to regain momentum after four consecutive quarters of declining same-store sales.
While Starbucks has already taken steps to improve its US stores, such as bringing back self-service condiment bars and ceramic cups, Niccol acknowledged that these were “low-hanging fruit.” The real challenge, he said, lies in transforming corporate operations to ensure long-term success.
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Despite the layoffs, Niccol emphasized that the job cuts were not purely cost-driven. Instead, he said, they were necessary to improve accountability and decision-making within the company. He reassured employees that there are currently no plans for additional workforce reductions but warned that further declines in performance could force difficult decisions.
Operational changes to win back customers
Starbucks is under increasing pressure to enhance its customer experience as economic conditions impact consumer spending. Niccol said that the company must be more strategic in the initiatives it introduces, ensuring that every decision directly benefits customers and store operations.
Even small details, such as ensuring electrical outlets are functioning so customers can work in stores, need greater attention, he said. Starbucks must also listen more closely to consumer feedback, particularly concerns about store conditions and order congestion.
“We have way too many follow-up meetings to fix way too many surprises,” Niccol said. “We’ve got to stop it.”
Starbucks will formalize its new leadership structures in meetings later this month, as Niccol prepares to address investors at his first shareholder meeting as CEO. With mounting competition and shifting consumer habits, his push for an in-office culture and operational discipline will be critical in determining whether Starbucks can successfully navigate its turnaround.
