The Starbucks cafe business is doing well. The office side keeps shrinking. On Friday, the coffee chain said it will cut 300 more U.S. corporate workers. It is also starting a review of its overseas office staff. The baristas pouring the lattes are not part of the cuts.
The split is the point. The stores are growing. The back office is not.
What Was Announced
The cuts cover 300 U.S. office roles. Starbucks also plans to review some regional support offices, which could lead to more cuts to come. The company will take a $400 million hit to its books on the move.
About $280 million of that is a writedown on office space the company will no longer need. The other $120 million is cash going out the door for severance pay.
A Starbucks spokesperson told CNBC that leaders took "a hard look at their respective functions to further sharpen focus, prioritize work, reduce complexity, and lower costs." Translation: more layers got pulled out of the org chart.
Want to know which moves actually move a stock? Market Briefs breaks the news down every weekday morning, and you get a free 45-minute investing masterclass when you join.
The Third Round Under Niccol
This is round three for CEO Brian Niccol. He cut 1,100 jobs back in February 2025, in his first big restructuring move. Seven months later, the company cut 900 more nonretail jobs as part of a $1 billion plan. Now Starbucks is going back for 300 more.
As of last September, Starbucks had 9,000 U.S. nonretail workers. It also had 5,000 staff overseas in regional support roles. That is the pool the cuts keep coming from.
The rest of the business is doing well, which is the strange part. U.S. same-store sales rose 7.1% last quarter, lifted by a 4.3% jump in transactions. That is two quarters in a row of traffic growth at Starbucks cafes. The turnaround at the store level is real.
What To Watch
The story now is the split between cafes and corporate. Customers are showing up. Office workers are getting cut. As long as Niccol's "Back to Starbucks" strategy keeps working at the store level, the market will likely let him keep shrinking the back end.
Niccol said in April that the latest quarter "marked a milestone for Starbucks - and the turn in our turnaround." That kind of language tends to come with more job cuts, not fewer, because growth at the cafe gives leadership the cover to keep tightening the office side.
The next thing to watch is the overseas review. Starbucks has 5,000 support workers based outside the U.S., and they are now on notice. If that group faces its own cuts, this round of 300 will look like the warm-up.
For now, the stock did not flinch. Shares were up slightly on the day, which says the market is comfortable with the cuts as long as the cafe numbers stay strong.
If you want this kind of read on the market every morning, join 350,000+ investors reading Market Briefs. You also get a 45-minute investing course as a bonus.
