Starbucks has announced layoffs, with the exception of China.

21st Century Business reporter He Hongyuan reports from Beijing

Starbucks enters a contraction cycle.

On February 24, 2025, according to media reports, Starbucks announced that it would lay off 1,100 jobs and reduce 30% of its menu items to reverse its declining sales.

This is the first time Starbucks has laid off employees since 2018. The affected employees will receive the news on February 25.

Starbucks also reduced some blended drinks such as Frappuccino and Latte to simplify operations and reduce the menu. The company said these drinks are not common and complicated to make.

It is worth noting that the 1,100 jobs to be cut are only a part of the scale of this contraction.

Starbucks Chairman and CEO Brian Niccol said in a letter to employees that the company would cut 1,100 current jobs and "hundreds" of vacant positions. Niccol had previously announced the upcoming layoffs, saying the company had too many layers. "Our goal is to improve operational efficiency, strengthen accountability, reduce complexity, and drive better integration," Niccol said.

Behind the adjustments is Starbucks' performance pressure.

Starbucks' first quarter of fiscal 2025 (ending December 29, 2024) showed that the company's revenue was US$9.398 billion, down 0.3% year-on-year; its net profit attributable to parent was US$781 million, down 23.8% year-on-year.

It should be noted that China is not included in this round of layoffs.

On February 25, Starbucks China responded to 21st Century Business reporter that Starbucks China's partners are not included in the global communication. "Starbucks firmly believes in the broad prospects of the Chinese market. We will continue to adhere to the strategy of high-quality, profitable and sustainable development," Starbucks China said.

Objectively speaking, Starbucks China itself has limited room for layoffs amid continued expansion.

In the latest quarter, Starbucks China's revenue was US$744 million, up 1% year-on-year. The main driving force was store expansion. In the latest quarter, Starbucks China had a total of 7,685 stores, up 10% year-on-year, covering over 1,000 county markets. Starbucks China said that new stores continue to maintain healthy profitability and operating returns, and achieve investment recovery within two years. The proportion of new stores in low-tier cities is increasing while business performance is also continuously better than the average of newly opened stores.

However, Starbucks China's same-store sales, transaction volume and average transaction value are all in the downward trend year-on-year. The good news is that the data is improving on a quarterly basis.