Starbucks Is Cutting Another 200+ Jobs as Restructuring Continues. The Turnaround Is Still on Track.

Starbucks is making another round of job cuts, reducing its workforce by over 200 positions as part of its ongoing restructuring efforts. The company filed a WARN notice last week, announcing that 224 jobs will be eliminated at its Seattle headquarters. Of these, approximately 104 positions are related to organizational changes, while around 120 are due to employees opting out of transfers to Nashville.

This job reduction follows the company's May announcement of 300 corporate layoffs, regional office closures, and $400 million in restructuring charges, including $120 million in employee separation benefits.

CEO Brian Niccol is leading Starbucks' "Back to Starbucks" strategy, which focuses on corporate streamlining and improving financial metrics. The company has delivered four consecutive quarters of positive comparable-store sales growth, with a 7.9% global increase in the fiscal third quarter. Starbucks now operates 41,304 locations and has a market value of $122.1 billion. As of August 24, the company's shares were trading at $107.49, up 26% year-to-date and 24% over the past 52 weeks.

Despite the job cuts, Starbucks' financial performance has been robust. In its latest fiscal quarter, the company reported revenue of $9.32 billion, surpassing analysts' estimates by 1.5%. Global comparable-store sales grew by 7.9%, reversing a 2% decline in the prior year. U.S. comparable sales also increased by 7.9%, driven by a 4.2% rise in transactions and a 3.6% increase in average ticket.

Adjusted earnings per share (EPS) rose 70% year-over-year to $0.85, surpassing the $0.65 analyst consensus by 30.8%. Starbucks' free cash flow margin expanded to 14.5% from 4.6% a year earlier, providing the company with greater flexibility during the restructuring process.

Starbucks is investing in internal AI tools to replace software from Microsoft and IBM, targeting a portion of its $400 million annual software expense. The enterprise technology division is expected to reduce its near-term budget by $30 million, including a $10 million immediate reduction in software costs. The company aims to launch the first deployments of these AI tools by late 2027, which could free up resources for labor, store equipment, and coffeehouse improvements.

Starbucks is also rebuilding its U.S. development pipeline, planning to open up to 175 new U.S. coffee shops this year and around 400 in 2028. These new stores will be smaller-format and cost 20% less to build than traditional locations, providing a lower-cost entry into new markets.