Coffee shop brand Starbucks announced Thursday it will lay off 900 employees and close hundreds of stores as part of its “Back to Starbucks” transformation.
A Securities and Exchange Commission (SEC) filing found that Starbucks will have about 500 gross closures as part of its restructuring, which is roughly a one percent decline of its company-operated stores in North America.
Roughly 900 Starbucks employees will be laid off as part of its plan.
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CNBC reported:
Starbucks estimates that 90% of the expected $1 billion restructuring cost will be attributable to the North America business. In total, the company expects to incur about $150 million in employee separation costs, plus about $850 million in restructuring charges related to the store closures, according to the filing. A significant portion of expenses will be incurred in fiscal 2025, it said.
The company plans to end its fiscal year with almost 18,300 North American locations, including both company-operated and licensed cafes. Starbucks plans to start growing its footprint again in fiscal 2026.
Starbucks said it will prioritize investment “closer to the coffeehouse and the customer” as it hopes to reverse a sales decline across the continent.
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This is the second round of layoffs this year under Brian Niccol’s tenure as CEO of the company.
“These steps are to reinforce what we see is working and prioritize our resources against them,” Niccol wrote in a letter to employees Thursday.
Niccol continued, “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.”
“I really hope we’re moving towards being the world’s greatest customer service company, [and] the world’s greatest customer-centric company,” he told CNBC in September.
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