Starbucks, the renowned coffeehouse chain, has unveiled plans to lay off 900 employees and shutter hundreds of its locations as part of a strategic initiative dubbed "Back to Starbucks.
".
This move, detailed in a Securities and Exchange Commission (SEC) filing, will result in approximately 500 store closures, marking a one percent reduction in its company-operated outlets across North America.
According to Breitbart, Starbucks anticipates that 90% of the projected $1 billion restructuring cost will impact its North American operations. The company expects to face around $150 million in employee separation expenses, alongside $850 million in restructuring charges tied to the closures.
These financial burdens are expected to peak in fiscal 2025. Despite these challenges, Starbucks aims to conclude its fiscal year with nearly 18,300 locations across North America, encompassing both company-operated and licensed establishments.
The company has expressed intentions to resume expansion in fiscal 2026.
Starbucks is focusing its investments "closer to the coffeehouse and the customer" in an effort to counteract declining sales across the continent. This marks the second wave of layoffs this year under CEO Brian Niccol's leadership.
"These steps are to reinforce what we see is working and prioritize our resources against them," Niccol conveyed in a letter to employees. He further emphasized, "I believe these steps are necessary to build a better, stronger, and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers, and the communities we serve."
Niccol's vision for the company is ambitious, as he expressed to CNBC in September, "I really hope were moving towards being the worlds greatest customer service company, [and] the worlds greatest customer-centric company."
This restructuring effort reflects a broader strategy to align the company's resources with its core strengths and customer-centric goals.
Login