Starbucks Announces Store Closures, Layoffs as โฃPart of Revitalization Plan
SEATTLE, WA – Julyโ 26, 2024 – Starbucks is undertakingโข a significant restructuringโ effort, announcing the closure โขof hundreds โof stores and a new round ofโ 900 corporate layoffs, according to CNN News. The move, impacting โคapproximately 1% of its total โstore count, is part of aโข broader strategy spearheaded by CEO brianโ Niccol to revitalize the coffeehouse โchain and improve financial performance.
Taking theโค helm a year ago, Niccol aims to refocus Starbucks on delivering a consistent customer experience and bolstering profitability. theโข company currently operates 18,734 stores across North America as of June, andโค projects a reductionโข to roughlyโฃ 18,300 locations โขby the end of September. โ
The restructuring is expected to โcost approximately $1 billion (R $5,365,250,000). In a message to employees,Niccol explained that closures will target locations deemed unable to โคmeetโค customer orโ employee expectations,or lackingโ long-term โfinancial viability.
This โlatest round of layoffs builds upon previousโฃ cuts made in February,bringing the total corporate job losses to 1,900. Affected employees will be notified friday and will receive severance and support packages.Additionally, Starbucks is freezing several open positions.
Despite the cuts, Starbucks intends to resume โexpansion, with plans to remodelโ over 1,000 existing stores toโฃ create more โฃinviting spaces featuring โคupdated dรฉcor, increased seating, and more power outlets. The menu is also undergoing changes, including streamlining offerings and introducing new items like protein toppings, coconut water, and revamped bakery selections.
However, the โคchanges aren’t without internal challenges. Reports indicate resistance to uniform adjustments and increased pressureโ on baristas due to the introductionโ of โmore complex beverage recipes during peak hours. since Niccol’sโ arrival, Starbucks shares have โdeclined by 12%, and sales โhave yet to demonstrate sustained recovery.