SBUX Starbucks Corporation

By Julie Jargon 

Starbucks Corp. is planning to lay off approximately 5% of its global corporate workforce as it seeks to become a more nimble company.

The plan comes as the Seattle-based chain struggles to attract new and repeat customers to its U.S. coffee shops amid a highly competitive coffee market.

The company on Tuesday said it will lay off 350 employees. That number doesn't include any employees who work in its cafes. In a memo sent to employees on Tuesday, Chief Executive Kevin Johnson said the areas impacted include marketing, creative, product, technology and store development. Employees were being informed of the job cuts on Tuesday.

Mr. Johnson said the change was aimed at focusing on fewer priorities and changing the way the various teams work. "The job impacts announced today are the most significant in this transformation," the company said.

Details of the restructuring follow a memo that Mr. Johnson issued to employees in September warning them that structural changes were coming. Part of the changes Starbucks has already begun to make 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.

The company has been focusing on determining the preferences of customers so it can better target them with offers that appeal to their ordering behavior. Starbucks recently opened its mobile order app to everyone -- not just to customers signed up for its rewards program -- bringing in 4 million new digitally registered customers in the past quarter.

In the afternoon, when traffic to its cafes is weaker than in the mornings, Starbucks is reducing the time employees spend on administrative tasks so they can focus on customer service. Starbucks is also trying to cater more to consumers who increasingly want to drink their coffee on the go. The company plans to open more stores with drive-through windows, and is testing delivery in Miami.

The company's challenges recently attracted activist investor William Ackman, who disclosed at 1.1% stake in Starbucks last month. Mr. Ackman so far has said he agrees with the changes Starbucks is making, which includes slowing the pace of store growth in the U.S. and expanding in China.

The company's shares got a bump earlier this month after it reported that sales growth in its home market beat expectations, due to an increase in average ticket. But getting more customers in its doors remains its primary challenge, the company has said.

Write to Julie Jargon at julie.jargon@wsj.com

(END) Dow Jones Newswires

November 13, 2018 12:44 ET (17:44 GMT)

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