Starbucks eyes first India tech office in a $2bn cost-cutting effort
It's time for a major restructuring for Starbucks, which is considering opening its first corporate technology office in India, as it targets up to $2 billion in cost cuts.
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It's time for a major restructuring for Starbucks, which is considering opening its first corporate technology office in India, as it targets up to $2 billion in cost cuts.
The office is planned for the company’s fiscal year 2027, starting in October, according to an internal memo viewed by Bloomberg.
Starbucks is expected to start the recruitment process later this year once the location is finalized.
The move marks a significant shift from the previous strategy, which focused on outsourcing tech-related tasks to third-party providers.
Starbucks is now aiming to reduce “reliance on external service providers,” according to a message to employees by Chief Technology Officer Anand Varadarajan.
In the message, Varadarajan added that “establishing a multi-site structure is a meaningful step toward that goal.” He previously pointed out that third-party providers charge a markup, so Starbucks would like to move forward independently to maintain full control over its digital infrastructure and protect its margins.
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The company currently works with multiple technology providers, such as Microsoft, while also relying on outsourced operations in India.
A Starbucks spokesperson said on Friday that the move is intended to “build closer connection to the work and the teams delivering it.”
The company has been pursuing aggressive cost-cutting measures, eliminating over 2,000 corporate roles. Just earlier this week, it was announced that Starbucks will cut 61 tech jobs at its Seattle headquarters following “a reorganization of the technology department at the Starbucks Support Center.”
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The turnaround is led by CEO Brian Niccol, who has announced several tech-related initiatives such as an AI-powered barista assistant and a Smart Queue order management system.
Starbucks has faced mounting pressure to improve operational efficiency, warning that it must continue strengthening its marketing, data analytics, and AI capabilities to avoid losing consumer interest and market share in a September filing with the US Securities and Exchange Commission.
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