Starbucks Announces Major Restructuring: 900 Jobs Cut and Stores Closed
Starbucks unveiled a $1 billion restructuring plan on Thursday, marking a significant shift in the company’s strategy. The plan will result in the elimination of 900 corporate jobs and the closure of approximately 1% of its North American locations. This move is part of CEO Brian Niccol’s accelerated “Back to Starbucks” turnaround strategy.
The coffee behemoth intends to close around 500 underperforming stores by the end of September. Despite these closures, Starbucks will end the fiscal year with nearly 18,300 total locations across the U.S. and Canada. This represents the second major layoff under Niccol’s leadership, following the 1,100 job cuts in February.
Starbucks aims to reinvest the savings into enhancing store experiences. This includes additional staffing during peak hours and remodeling over 1,000 locations with more inviting designs.
Starbucks has faced six consecutive quarters of declining same-store sales in North America, with transactions down 4% in the latest quarter. The restructuring is intended to refocus resources on locations that can deliver both the premium coffeehouse experience and strong financial performance.
Affected non-retail employees will receive “generous severance packages,” according to the company. Starbucks also plans to offer transfers to nearby locations for store workers where possible.
Source: CNBC