Starbucks is set to reduce its workforce by approximately 900 non-retail staff and shut down a number of stores in the United States and Canada to prioritize its business turnaround efforts. The renowned coffee company based in Seattle will inform the impacted employees on Friday and plans to shutter an undisclosed quantity of locations across North America in the near future.
A representative from Starbucks Canada has confirmed the development but refrained from disclosing the specific number of affected Canadian employees or the targeted Canadian store closures. An evaluation of Starbucks outlets has indicated that many are not meeting financial targets or failing to deliver the expected customer experience, as outlined in a communication by Starbucks CEO Brian Niccol on Thursday.
In the message, Niccol highlighted that the company routinely opens and closes coffeehouses due to various factors like financial performance and lease expirations. However, this current move represents a significant decision that will impact both employees and customers. Niccol emphasized the importance of Starbucks locations as community hubs and acknowledged the challenges associated with any closure.
Starbucks has projected that it will conclude the fiscal year with 18,300 stores in North America, marking a decrease of 124 stores compared to the previous year. The reduction in store count within a fiscal year is an unusual occurrence for Starbucks. Niccol, known for his expertise in turnarounds, joined Starbucks a year ago with the aim of revitalizing the brand.
During his tenure at Chipotle, where Niccol served as CEO for approximately six years, the struggling chain experienced substantial growth in revenue, profit, and stock price. Starbucks has assured that it will provide severance packages and assistance to the affected employees.