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Q13 FOX Season of Giving

‘We have a tough day ahead of us’: Starbucks laying off hundreds of people at Seattle HQ

SEATTLE -- Starbucks is laying off about 350 people, mostly at its corporate headquarters in Seattle.

Company spokesperson Jaime Riley confirmed the layoffs to Q13 and said affected employees will be notified Tuesday (Nov. 13).

"We have a tough day ahead of us here in Seattle," Riley said. "While these are hard decisions to make, they are consistent with our efforts to build the next chapter of Starbucks."

The layoffs represent about 5 percent of the company's non-retail workforce and are part of a restructuring plan that CEO Kevin Johnson announced in September.

"The company imperative is to focus on fewer priorities, transform how our functional teams work and have a laser focus on what is relevant to customers, inspires our partners and is meaningful to our business," Riley said. "You should think about these changes as part of our growth agenda."

Johnson told employees in a letter that the layoffs are a result of work that has been eliminated, de-prioritized, or "shifting ways of working in the company."

More recently, Starbucks has freed up cash and resources by closing its Teavana retail stores, partnering with Nestle to create a "global coffee alliance" and reorganizing its corporate team.

"I tend to bring a much more disciplined approach to picking the priorities," Johnson said during the Oppenheimer Consumer Conference in June. "If you pick the right priorities and you put the resources and energy behind them, you move the needle."

Since taking over from Howard Schultz in April of last year, Johnson has outlined a plan to trim fat and bolster the company in its two largest markets. So far, it's working.

Starbucks (SBUX) beat Wall Street's expectations for its fourth-quarter earnings. Revenue grew to $6.3 billion in the quarter that ended in September, up 11% from the same time last year. In the three months ending in September, comparable store sales grew by 4% in the United States and 1% in China. The good results sent shares of the company soaring.

In the United States, Starbucks is growing at a slower pace than it has in the past. But it's still going after new markets.

"I’ve talked about the need to make these hard decisions for a while now, and I want you to know we will handle each situation with compassion and respect for the impacted partner," Johnson said in the letter he sent to employees.