Starbucks Shares Fall As CEO Pushes For Accountability During Reorganization, Layoffs: What's Going On?

Starbucks Corp SBUX shares are trading lower Thursday following reports suggesting the company is reorganizing to hold leadership more accountable for financial and operational improvements.

What To Know: According to the Wall Street Journal, in his first public remarks since announcing widespread layoffs, CEO Brian Niccol addressed corporate workers on Tuesday, emphasizing the need for increased accountability and a more effective decision-making process.

Niccol criticized the company's current operational inefficiencies, stating that Starbucks is not effective in how it implements decisions and holds leaders responsible. The message came after the company cut 1,100 corporate jobs globally, including 612 positions tied to its Seattle headquarters and remote employees.

Niccol, who took over as CEO last September, framed the situation as a critical turnaround effort. He acknowledged that while Starbucks has made some progress — such as reintroducing self-service condiment bars and ceramic cups — deeper changes are required at the corporate level to restore long-term growth.

Starbucks has faced four consecutive quarters of declining same-store sales as customers increasingly choose faster and more affordable alternatives. Niccol said the recent job cuts were not primarily aimed at reducing costs but were necessary to restructure leadership for better performance. He indicated there are no immediate plans for further layoffs but stressed the need for improved operations to avoid future cuts.

The company is also pushing for more in-office work, with about 40% of its North American corporate employees currently working remotely. Niccol argued that having more employees present in Starbucks's U.S. and Canadian offices would enhance collaboration and problem-solving.

Addressing practical issues within stores, Niccol highlighted the need to address customer concerns, from fixing electrical outlets to improving the handling of drink orders. He criticized the company's tendency to rely on excessive follow-up meetings to resolve problems, calling for more decisive and proactive action.

SBUX Price Action: Starbucks shares were down 4.87% at $106.26 at publication Thursday, according to Benzinga Pro.