Starbucks is implementing workforce reductions affecting approximately 900 non-retail staff and initiating the closure of several U.S. and Canadian outlets to enhance its turnaround efforts. The renowned coffee company, headquartered in Seattle, will inform impacted employees early on Friday and intends to shut down an undisclosed number of North American stores in the upcoming days.
A spokesperson from Starbucks Canada confirmed the developments, refraining from specifying the exact number of affected Canadian employees or the locations slated for closure. An evaluation of Starbucks branches indicated that numerous establishments are not meeting financial targets or failing to deliver the expected customer experience, as outlined in a message from Starbucks CEO Brian Niccol on Thursday.
In the communication, Niccol mentioned that the company annually opens and shuts down coffeehouses for various reasons, such as financial performance and lease expirations. He acknowledged that this decision will have a significant impact on partners and customers, emphasizing the community-centric nature of Starbucks outlets and the challenges associated with closure.
Starbucks disclosed that it anticipates concluding the fiscal year with 18,300 stores in North America, marking a reduction of 124 outlets compared to the previous year, an unusual move for the brand. Niccol, a seasoned turnaround expert appointed to Starbucks a year ago, has a track record of revitalizing brands, notably achieving substantial revenue and profit growth at Chipotle during his tenure.
The company reassured affected employees of its commitment to providing severance packages and support during this transition period.