Starbucks Announces Store Closures, Layoffs as Part of Revitalization Plan
SEATTLE, WA – July 26, 2024 – Starbucks is undertaking a significant restructuring effort, announcing the closure of hundreds of stores and a new round of 900 corporate layoffs, according to CNN News. The move, impacting approximately 1% of its total store count, is part of a broader strategy spearheaded by CEO brian Niccol to revitalize the coffeehouse chain and improve financial performance.
Taking the helm a year ago, Niccol aims to refocus Starbucks on delivering a consistent customer experience and bolstering profitability. the company currently operates 18,734 stores across North America as of June, and projects a reduction to roughly 18,300 locations by the end of September.
The restructuring is expected to cost approximately $1 billion (R $5,365,250,000). In a message to employees,Niccol explained that closures will target locations deemed unable to meet customer or employee expectations,or lacking long-term financial viability.
This latest round of layoffs builds upon previous 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 expansion, with plans to remodel over 1,000 existing stores to create more inviting spaces featuring updated décor, 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 changes aren’t without internal challenges. Reports indicate resistance to uniform adjustments and increased pressure on baristas due to the introduction of more complex beverage recipes during peak hours. since Niccol’s arrival, Starbucks shares have declined by 12%, and sales have yet to demonstrate sustained recovery.