Additional Coverage:
- Starbucks Laying Off Hundreds of Workers, Closing Locations (cheapism.com)
Starbucks Feeling the Jitters: Coffee Giant Announces Layoffs and Store Closures
Even the most devoted pumpkin spice latte fans might be noticing a chill in the air around Starbucks, and it’s not just the changing seasons. The international coffee shop giant has recently announced a significant restructuring effort, including corporate layoffs and the closure of numerous locations, signaling a challenging period for the beloved brand.
Why the Downturn?
Starbucks has been experiencing a bit of a slump, reporting six consecutive quarters of lower same-store sales. This dip in customer purchases has prompted the company to enact a “transformation strategy” earlier this year, aimed at revitalizing its operations and “building toward a better Starbucks.”
Corporate Workforce Reductions
As part of this strategic overhaul, Starbucks initiated a round of corporate layoffs. A letter sent to employees by CEO Brian Niccol confirmed that approximately 900 corporate staff members were laid off on Friday, September 26.
These reductions exclusively affected corporate roles and did not extend to in-store baristas or other retail employees. This marks the second wave of corporate layoffs for Starbucks this year, following a global reduction of 1,100 employees and the elimination of hundreds of open positions in February.
Affected employees are reportedly receiving severance, support packages, and extended benefits.
Store Closures on the Horizon
In addition to the staff cuts, Starbucks is also trimming its physical footprint. The company plans to close a percentage of its coffee shop locations, identifying stores that are “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”
While an exact list of closures hasn’t been released, Starbucks indicated that about 1% of its total shops would be shuttered. With approximately 18,734 locations as of June, this could mean over 200 stores across the U.S. and Canada are slated for closure.
Employees at affected stores are expected to be transferred to nearby locations where possible, or offered severance packages.
What This Means for Local Coffee Lovers
While these changes are part of a broader national strategy, they could eventually impact local communities. Customers might find a favorite Starbucks location closing its doors, and the company’s efforts to streamline operations aim to improve the overall experience at remaining stores. For now, the coffee giant is hoping these strategic moves will brew up a brighter future.
Read More About This Story:
- Starbucks Laying Off Hundreds of Workers, Closing Locations (cheapism.com)