Starbucks is set to lay off approximately 900 non-retail staff and shut down several U.S. and Canadian stores as part of a strategic reallocation of resources to facilitate a company turnaround. The Seattle-based coffee behemoth plans to inform affected employees of the workforce reduction on Friday and intends to finalize the closure of an undisclosed number of establishments across North America in the near future.
A spokesperson for Starbucks Canada has confirmed the development but refrained from specifying the exact number of Canadian employees impacted or pinpointing the precise locations facing closure. A communication from Starbucks CEO Brian Niccol highlighted that a review of the company’s outlets revealed various instances of underperformance in meeting financial targets or failing to deliver the expected customer experience.
Niccol emphasized in a memo that the decision to open or close coffeehouses annually is driven by multiple factors, including financial viability and lease considerations. He acknowledged the significance of the current restructuring, recognizing its impact on both employees and patrons, given that Starbucks outlets serve as integral community hubs.
The coffee chain disclosed its projection to conclude the fiscal year with 18,300 stores in North America, marking a reduction of 124 outlets compared to the previous year—a rare occurrence for Starbucks to downsize its store network within a fiscal cycle. Niccol, renowned as a turnaround expert, was appointed to revitalize the Starbucks brand one year ago, following his successful tenure at Chipotle, where he orchestrated a substantial surge in revenue, profits, and stock value.
Starbucks plans to extend severance packages and comprehensive support to the employees affected by the restructuring initiative.