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Starbucks Hires Baristas, Scales Back Automation - ListenHub

Starbucks Hires Baristas, Scales Back Automation

Apr 30

Frombbc

Starbucks hires more baristas and scales back automation, including the Siren Craft System, to improve customer experience and reverse sales decline after poor financial performance, also revamping stores and dress code.

Starbucks Rethinks Automation, Hires More Baristas

Starbucks is hiring more baristas and scaling back automation plans to win back customers.
CEO Brian Niccol aims to improve customer experience after sales decline.
This reverses the trend of food/drink chains using tech to cut costs.
Financial results were worse than expected with sales continuing to fall.

Labor vs. Automation: Acknowledging the Imbalance

Starbucks removed labor in past years, hoping equipment would compensate.
Niccol admitted this assumption was inaccurate.
More staff were tested in some stores starting September 2024 with positive outcomes.
The approach is expanding to 3,000 stores this year.

Siren Craft System Scaled Back

The Siren Craft System, tech introduced in 2022 to streamline drink-making, will be pulled back.

Investing in Growth

More staff means higher costs, but Starbucks expects growth to come from the investment.

Other Changes

Starbucks is also revamping coffee shops, menus, and the company's dress code. Baristas now wear dark, single-colored shirts to showcase the green apron.
In January, reversed rules in North America that allowed non-customers to use facilities.

Financial Performance

Global sales fell 1% in the three months ending March (fifth quarterly decline).
Sales rose in China and Canada, but US trading remained weak.
Starbucks shares fell over 6.5% after the earnings announcement

Outline

Starbucks hires more baristas and scales back automation, including the Siren Craft System, to improve customer experience and reverse sales decline after poor financial performance, also revamping stores and dress code.

Starbucks Rethinks Automation, Hires More Baristas

Starbucks is hiring more baristas and scaling back automation plans to win back customers.
CEO Brian Niccol aims to improve customer experience after sales decline.
This reverses the trend of food/drink chains using tech to cut costs.
Financial results were worse than expected with sales continuing to fall.

Labor vs. Automation: Acknowledging the Imbalance

Starbucks removed labor in past years, hoping equipment would compensate.
Niccol admitted this assumption was inaccurate.
More staff were tested in some stores starting September 2024 with positive outcomes.
The approach is expanding to 3,000 stores this year.

Siren Craft System Scaled Back

The Siren Craft System, tech introduced in 2022 to streamline drink-making, will be pulled back.

Investing in Growth

More staff means higher costs, but Starbucks expects growth to come from the investment.

Other Changes

Starbucks is also revamping coffee shops, menus, and the company's dress code. Baristas now wear dark, single-colored shirts to showcase the green apron.
In January, reversed rules in North America that allowed non-customers to use facilities.

Financial Performance

Global sales fell 1% in the three months ending March (fifth quarterly decline).
Sales rose in China and Canada, but US trading remained weak.
Starbucks shares fell over 6.5% after the earnings announcement

Script

Mia: So, I saw this headline: Starbucks is, like, *hiring* baristas? Scaling *back* automation? What's the deal? I thought everything was going robot these days.

Mars: Dude, totally. It's a trip, right? For years, they were all about these fancy espresso machines to save on labor costs. But apparently, their CEO, Brian Niccol, realized something was missing.

Mia: Missing? Like, what? The perfectly steamed milk? I mean, I just want my latte.

Mars: More like the *human* touch. Apparently, sales were dipping, and the bean counters weren't happy. People weren’t vibing with the robot baristas.

Mia: Wait, seriously? I thought everyone loved those kiosks. I mean, less human interaction, right? Quicker coffee fix?

Mars: That's what *they* thought. But in some test stores, they actually *added* staff. Turns out, lines moved faster, the baristas were chatting people up, and everyone was leaving, like, *happier*. Go figure.

Mia: So, they thought they could replace people with machines, and it totally backfired? That's kinda like buying a super fancy espresso machine for your house and then still going to Starbucks every day.

Mars: Exactly! They had this Siren Craft System, supposed to automate *everything*. But it made the place feel sterile, and the machines would jam up during rush hour. Total chaos! Niccol even admitted that ditching the baristas was a mistake.

Mia: Wow. So, they're actually adding staff back? Like, rolling this out to more stores?

Mars: Yep. They're calling it a human-first model, and they're planning to put it in about 3,000 locations this year. More baristas, more chit-chat, hopefully more happy customers.

Mia: Okay, that makes sense. People are willing to drop a little extra cash if they feel like they're being *seen*, not just scanned.

Mars: Totally. It's an investment. Plus, they're giving the shops a makeover. New layouts, menu tweaks... even the baristas get to wear dark shirts now so their green aprons pop more.

Mia: Oh, I heard they're cracking down on the bathroom thing, too, right? I saw something about non-customers not being able to use the restrooms anymore?

Mars: Bingo! They shut down that loophole in January. They're trying to streamline the whole experience for paying customers, from the menu to the music.

Mia: All this stuff must be costing them a fortune! How are they doing, like, financially?

Mars: Honestly? Not great. Global sales are down, the U.S. is lagging behind... Their stock even took a nosedive after their last earnings call.

Mia: Ouch! But if this barista boost works, maybe we'll see a turnaround later this year?

Mars: That's the gamble. More staff, better service, fresh look... They're betting on bringing back that loyal customer base. If they can get people spending more, then the extra payroll will be worth it.

Mia: Fascinating. So, Starbucks is basically saying, automation is cool... to a point. But nothing beats a friendly face who remembers your order.

Mars: You nailed it. It's a reminder that tech should *help* people, not replace them.

Mia: Alright, that's the skinny on Starbucks. Whether you're team barista or team robot, it's definitely something to keep an eye on. Thanks for the deep dive!