Starbucks has reportedly scrapped an AI inventory tool that its CTO Deb Hall Lefevre had called ‘AI powered automated counting brewing a better experience at Starbucks’ in a deleted blog post. According to an exclusive report by Reuters, Starbucks terminated the AI tool nine months after deploying it across its North American stores. The report cites an internal newsletter reviewed by the news agency and two people with direct knowledge of the situation. The AI tool is said to be part of CEO Brian Niccol’s efforts to fix the coffee chain’s persistent product shortages that he has blamed for hurting sales. However, the automated counting tool had been in testing in the years before Niccol took the helm and deployed it.Starbucks rolled out the “Automated Counting” software in September 2025, the AI-powered tool designed to improve Starbucks’ visibility into shortages at stores and to speed up inventory tracking. Employees would use mobile devices powered by the AI tool to scan items on shelves. The idea reportedly was simple: Automate the tedious task of counting milks and syrups, increase accuracy, and optimize the supply chain. Developed in partnership with NomadGo, the app reportedly frequently miscounted and mislabeled items, such as confusing similar milk types or missing them altogether.Incidentally, in February, Starbucks told Reuters that adoption of the tool had improved product availability in stores – one of Niccol’s primary store-level measures of progress in his corporate turnaround campaign. That announcement, since deleted from the company’s website, said the technology would set the stage for “smarter supply chain optimization.”
What Starbuck said on scrapping the AI tool
“Starting today, Automated Counting will be retired,” read an internal company newsletter dated Monday (May 18). “Beverage components and milk will now be counted the same way you count other inventory categories in your coffeehouse.”In a statement to Reuters, Starbucks said the termination of the program came from a decision to “standardize how inventory is counted across coffeehouses as we continue to focus on consistency and execution at scale.” The coffee chain also said that it is working towards more frequent, daily replenishments to stores and continued supply chain improvements. “Our goal is simple – if it’s on the menu, customers should be able to order it,” the company said.At the time of launch in September 2025, CTO Deb Hall Lefevre had said, “With a quick scan using a handheld tablet, partners can instantly see what’s in stock — ensuring cold foam, oat milk, or caramel drizzle are always available,” it read. “Customers can enjoy beverages their way, every time — and partners spend less time in the backroom and more time crafting and connecting.”
Layoffs at Starbucks
Starbucks CEO Niccol is said to be leaning on technology in his operations-focused turnaround called “Back to Starbucks”. The CEO, known for pushing through turnarounds at Chipotle and Taco Bell, is reportedly under pressure from investors to sustain recent sales growth and improve profits that have sagged under his hefty investments in additional staffing. Earlier this month, Starbucks said that it is laying off 300 US corporate employees in its regional support offices as it seeks to return to “durable, profitable growth”. The company said it is consolidating some US regional support offices, closing some including those in Atlanta, Burbank, Chicago and Dallas. The company said that it is also reviewing its international support organizations and expects more job cuts outside America. Starbucks employees have gone through several rounds of layoffs since the turnaround began, including a lay-off of 1,100 corporate employees announced in February last year. The company said the moves are part of an on-going effort to “sharpen focus, prioritize work, reduce complexity, and lower costs.” Starbucks posted its strongest quarterly sales growth in 2-1/2 years last month, but operating margins in its core North American market have fallen to 9.9% from 18% two years earlier, before Niccol took the helm.
