The Starbucks coffee giant will fire workers and close stores as part of a $ 1 billion restructuring plan, CEO Brian Niccol He said in a memo To employees on Thursday.
The company will reduce 900 employees in unlacal roles in North America, Niccol said. The store closures will amount to a decrease of approximately 1% in the total number of Starbucks locations in North America in this fiscal year, after counting some store openings, Niccol added.
“While we are making good progress, there is much more to do to build a better, stronger and more resistant Starbuck,” Niccol said.
Starbucks shares marked a little higher in trade prior to the market after the announcement on Thursday.
Starbucks resisted slow sales in recent years when customers dealt with a high inflation attack of years, analysts previously said to ABC News. The company has experienced six consecutive quarters of decreased sales of the same store, a metric that examines performance in individual locations over time.
Coffee Starbucks in Indianapolis.
Jonathan Weiss/Adobe Stock
Starbucks has tried to improve the interior of many of its stores in an effort to attract customers and increase sales. In a review of its locations, the company identified stores where these changes would not be attainable, Niccol said.
“During the review, we identify coffee shops where we cannot create the physical environment that our clients and partners expect, or where we do not see a path to financial performance, and these locations will close,” Niccol said.
“Every year, we open and close coffee shops for a variety of reasons, from financial performance to the expiration of the lease. This is a more significant action that we understand that will affect partners and customers. Our coffee shops are community centers, and close any location is difficult,” added Niccol.
The company expects to finish fiscal year 2025 with 18,300 store locations in the United States and Canada, Niccol said. Starbucks plans to inform employees this week in the stores designated for closing.
Starbucks hopes to relocate employees to other stores, Niccol said, adding that the company will aim to provide a “comprehensive compensation.”
This is a development story. Consult the updates again.
