Starbucks axes some drinks and staff in bid for US turnaround

Starbucks is cutting 1,100 jobs and simplifying its menu in the US as it tries to improve flagging business in its home market.

The first items to get the axe include the Royal English Breakfast Latte, White Hot Chocolate and several kinds of blended frappuccinos.

But Starbucks said more offerings would be cut, as it aims to shrink its menu by nearly a third over the next year, hoping to reduce wait times and improve quality and consistency.

The company has been wrestling with a sustained fall in sales since last year, which has been particularly pronounced in the US.

Chief executive Brian Niccol, who previously headed the Mexican food chain Chipotle, was brought into Starbucks last year to help turn the business around.

He has said he wants to see the company return to its roots as a coffee house.

The drinks set for the chopping block “weren’t commonly purchased, can be complex to make, or are like other beverages on our menu”, Starbucks said. The changes are due to go into effect on 4 March.

“We’re simplifying our menu to focus on fewer, more popular items, executed with excellence,” the company said on Monday.

“This will make way for innovation, help reduce wait times, improve quality and consistency, and align with our core identity as a coffee company.”

The job cuts announced on Monday are focused on corporate “support partner” roles and will not affect jobs or investments at stores, the company said.

The company said it would inform staff affected by the decisions by mid-day on Tuesday. It is also eliminating “several hundred” open and unfilled positions.

“Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration,” Mr Niccol wrote in the announcement.

Starbucks employs more than 360,000 people and operates or licenses more than 40,000 stores around the world.

The US is its biggest and most important market, but its brand there has suffered in recent years as customers complained about long wait times and high prices, and the company wrestled with baristas trying to unionise.

The company was also embroiled in debates over the Israel-Gaza war, facing boycott calls from both pro-Israel and pro-Palestine camps, despite the company’s efforts to remain neutral.

The company last month said transactions at US stores open at least a year were down 8% in the most recent quarter, compared with the same period a year earlier.

The drive to simplify the menu marks a shift from previous strategies, which emphasised personalised drinks.