Starbucks Names Interim CTO Amid AI Revamp
Starbucks Names Interim CTO Amid Tech Revamp and Corporate Cuts
Starbucks has appointed Ningyu Chen, formerly senior vice president of global experience technology, as interim chief technology officer, following the resignation of Lefevre, the company’s previous CTO. The announcement came via a memo from Chief Financial Officer Cathy Smith.
Lefevre, a former McDonald’s executive who joined Starbucks in May 2022, cited retirement in her departure. Her resignation coincides with Starbucks’ second round of significant corporate layoffs, effective Friday, as CEO Brian Niccol pushes ahead with a tech-driven strategy to improve store efficiency and revive sales after six consecutive quarters of decline.
AI and Technology at the Forefront
The chain’s turnaround plan, known as “Back to Starbucks,” relies heavily on technology. Initiatives include an AI-powered automated inventory counter, set to be rolled out to all company-owned North American stores by the end of September. Additional measures include an AI assistant for baristas, a new point-of-sale system, and a queuing algorithm designed to streamline orders during peak hours.
“Our tech priorities aren’t changing,” the memo said. “We’re focused on the tech work needed to deliver our Back to Starbucks plan.”
Store Closures and Job Cuts
As part of the restructuring, Starbucks also announced it will close underperforming U.S. stores, reducing its company-owned locations in the U.S. and Canada by around 1%, with several hundred closures expected by the end of the 2025 fiscal year. In addition, 900 non-retail roles will be eliminated, with employees set to be notified on Friday.
A source familiar with the matter noted that Starbucks’ February layoffs of 1,100 corporate employees hit the IT division particularly hard, with Indian contractor Tata Consultancy Services taking on an expanding role in IT operations. Despite this, Starbucks emphasized it will maintain a “very significant in-house technology team,” focusing on critical projects.
Financial Performance and Outlook
Starbucks shares have fallen over 12% in the past year, underperforming the 16% gain of the S&P 500 index. CEO Brian Niccol, who took over last year, continues to push the chain’s tech revamp and “coffeehouse” appeal to reverse declining sales trends.
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