Starbucks, which laid off an undisclosed number of senior executives in September and warned employees that more significant changes were coming, has now announced that it will lay off about 350 corporate employees across marketing, product, creative, technology and store development.
In an email to employees on Tuesday, CEO Kevin Johnson said that the layoffs, which represent about 5% of Starbucks’s corporate workforce, were the result of shifting strategies that have eliminated or deprioritized some types of work.
The changes reflect the results of a thorough review of the company’s senior management structure, within the context of Starbucks’ goals of using customer data and analytics to better target offers, enabling faster innovation, and driving bigger investor returns.
According to The Wall Street Journal, Starbucks’ new structural changes include “consolidating its analytics teams so that employees in different parts of the business can respond more quickly to changing consumer trends, and tweaking its digital marketing strategy.”
Leading up to this week’s announcement, Puget Sound Business Journal reported on personnel changes made on Starbucks’ leadership page.
These included the removal of seven executives, including Pam Greer, SVP of global strategy, insights and analytics; and Aimee Johnson, SVP of customer relationship management.
(Starbucks declined to confirm specific departures to the journal, but said those removed from the page reflected a “combination of voluntarily and involuntary departures, including sabbaticals and new roles at Nestle through a $7.15 billion deal for the Swiss company to sell Starbucks' products.”)
Meanwhile, five recent additions made to the leadership page included Emily Chang, listed as SVP of U.S. marketing; and Gina Woods, listed as SVP of marketing, brand and partner communications, according to the report.
Chang, whose LinkedIn page indicates that she assumed the new role this month, had previously been CMO of Starbucks China since June 2017.
In that role, she “helped define the brand experience for the Shanghai Roastery, completed the commercial integration of [Starbucks’] East China business, and operationalized the customer digital experience by bringing together digital payments, social gifting, AR, loyalty and, most recently, delivery,” according to her profile on the Starbucks leadership page.
Previously, Chang served as chief commercial officer for Intercontinental Hotels Group, and as head of retail marketing, Asia, for Apple.
Woods’ LinkedIn page indicates that her new role actually commenced five months ago, in July.
Woods has served in a series of positions since joining Starbucks nearly 14 years ago. Most recently, she was president of brand and entertainment for about five years, and prior to that was director of executive communications for more than two years.
After several quarters of lackluster growth, on November 1, Starbucks reported record sales for its fiscal fourth quarter — including strong 4% growth in U.S. and Americas comparable-store sales.
However, the sales growth resulted from a 5% increase in average ticket price, reflecting product price hikes. Starbucks’ transactions actually declined by 1% versus a year earlier, and traffic trends have been weak.
But traffic improved in the most recent quarter, thanks in part to a new focus on driving business during the afternoon by promoting high-end cold drinks.
Other new Starbucks initiatives are its recent opening up of its mobile app to all consumers (not just rewards program members), and a push to add drive-through windows and delivery options.