Seattle, Washington — In a strategic shift, Starbucks plans to increase its workforce and reduce its reliance on automation, a move aimed at revitalizing customer engagement. Chief Executive Brian Niccol announced these changes amid disappointing financial results and ongoing challenges related to consumer spending and rising costs.
Niccol, who joined Starbucks in September 2024, has been charged with reversing the coffee giant’s fortunes, especially as other food and beverage chains enhance their technology to lower expenses. In a recent discussion with investors, he acknowledged the miscalculation in relying on technology to replace staff, stating, “What we’re finding is that wasn’t an accurate assumption with what played out.”
To test this new approach, the company began increasing staff numbers in select locations shortly after Niccol took the helm. The initiative is set to expand to around 3,000 stores this year, marking a significant shift from previous strategies that sought to reduce labor costs through automation.
Alongside the hiring initiative, Starbucks will now limit its deployment of the Siren drink-making system, introduced in 2022 to enhance operational efficiency. This technology, named after the company’s iconic logo, aimed to streamline beverage preparation but has not met the anticipated outcomes.
Niccol recognizes the financial implications of hiring more baristas, admitting it will involve increased expenditures. Nevertheless, he remains optimistic, asserting he is “banking on some growth to come with the investment.” This belief is part of a broader strategy that includes renovations to stores, updates to menus, and a revised dress code for staff.
In a nod to brand identity, Starbucks announced that its baristas would now wear dark, solid-colored shirts, allowing the signature green apron to stand out. This change is among several adjustments made in recent months, including the reinstatement of policies allowing customers to use facilities without a purchase, reversing earlier restrictions that had been in place for six years.
Despite these efforts, Starbucks is still grappling with sluggish sales. The most recent financial report revealed a 1% decline in global sales for the quarter ending March, marking the fifth consecutive quarter of downturn. While the U.S. market continues to struggle, sales in China and Canada have shown promising growth.
Starbucks’ stock saw a decline of over 6.5% in after-hours trading following the release of its financial results, signaling investor concern over the company’s current trajectory. As Niccol implements his turnaround strategy, the future remains uncertain, yet the company’s renewed focus on its workforce may offer a pathway to recovery.