Starbucks has found that removing human labor in favor of machines doesn’t work for the company — so now the coffee chain is hiring old-fashioned human baristas at thousands of stores.
Starbucks CEO Brian Niccol stated in a call with investors earlier this week that the company’s effort to reduce headcount over the past few years and replace humans with machines had backfired: Advanced machinery proved to be an inadequate substitute for human labor.
“Over the last couple of years, we’ve actually been removing labor from the stores, I think with the hope that equipment could offset the removal of the labor,” Niccol said on the call, per The Guardian. “What we’re finding is that wasn’t an accurate assumption with what played out.”
By the time Niccol joined Starbucks in September 2024, the company had been testing out human staff increases at just a handful of locations. Niccol broadened the effort this year to include 3,000 locations of the coffee chain’s 40,000 stores globally.
Niccol stated that new technology alone doesn’t cut it. Starbucks needed to adequately staff stores and allow employees access to new equipment to deliver a better customer experience.
“Equipment doesn’t solve the customer experience that we need to provide, but rather staffing the stores and deploying with this technology behind it does,” Niccol said on the call.
Niccol noted that increasing staff would entail higher costs but asserted that “some growth” for the company would accompany the move.
Starbucks CEO Brian Niccol. Photo by Kevin Sullivan/Digital First Media/Orange County Register via Getty Images
The move to hire new baristas is part of Niccol’s plan to turn Starbucks around after five consecutive quarters of declining sales. Starbucks reported on Tuesday that same-store sales dropped 1% in the first quarter of 2025, falling short of Wall Street expectations.
Related: It’s Pay-to-Stay at Starbucks As the Coffeehouse Reverses Its Open Door Policy
Niccol reassured investors on the call that though the financial results proved “disappointing,” Starbucks was “really showing a lot of signs of progress” internally. For example, the average time to deliver in-store orders had declined by an average of two minutes during the quarter, he said.
Niccol’s plan to turn around Starbucks includes limiting the number of items customers can order through mobile, adding ceramic mugs for in-store orders, cutting 30% of the menu, writing customers’ names down with Sharpies on their cups, and asking baristas to make orders in under four minutes. Starting May 12, Starbucks will also require baristas to dress uniformly in a solid black top and khaki, black, or blue denim bottoms.
Starbucks operates 16,941 stores in the U.S. and has 211,000 U.S. employees. The company’s stock was down about 11% year-to-date at the time of writing.
The post originally appeared on following source : Source link