Starbucks (SBUX) CEO Brian Niccol continued his turnaround plan for the struggling coffee chain by revealing large corporate layoffs. An email to employees revealed that Starbucks is cutting 1,100 jobs to streamline its operations, reduce redundancy, and improve efficiency.
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While Starbucks is pushing for job cuts, it won’t stop hiring. Niccol said the company will continue to “hire for priority positions that fit with our new support structure and add capability and capacity we need.” The coffee company employs roughly 361,000 globally.
It’s not just employees getting cut. Starbucks also announced it will retire some drinks from its menu. This matches its layoffs by simplifying its offerings, freeing up space for new items, and eliminating underperforming drinks. The cuts start in March and will see 13 drinks removed from the coffee chain’s menu.
Niccol’s Effect on Starbucks Stock
Since Niccol took over as the CEO of Starbucks six months ago, the company’s shares have undergone a strong rally, sending them 20.3% higher. This positive momentum is welcomed by investors as slowing sales in the U.S. and China were weighing on SBUX stock.
News of Starbucks layoffs continues rising momentum with SBUX stock up 1.57% as of this writing. That builds on a 25.31% increase year-to-date and the company’s 23.7% rally over the last year. This has the stock finally closing the gap on pandemic prices when SBUX stock hit an all-time high of $126.03.
Is SBUX Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Starbucks is Moderate Buy based on 15 Buy, five Hold, and one Sell ratings over the last three months. With that comes an average price target of $110.70, a high of $125, and a low of $76.
