Starbucks to slash 900 jobs in USD1b restructure
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The news: US coffeehouse franchise Starbucks said that it will close stores and cut jobs in a company overhaul lead by new CEO Brian Niccol.
The numbers: In a Thursday SEC filing, the group said it plans to lay off 900 corporate employees as well as reduce its store count by 1% during FY25, ultimately ending the year with 18,3000 total locations across the US and Canada.
Nicol said that the company will then grow the number of stores and carry out refurbishments on another 1,000 locations over the next 12 months.
Starbucks estimates that it will incur approximately USD1 billion ($1.52 billion) in expenses related to the store closures, refurbishments, and other restructuring activities. Employee separation benefits will cost around USD150 million.
The company’s shares were down over 1.5% in premarket trading in New York.
The context: Most of the affected workers are located in North America, and Starbucks plans to notify affected workers on Friday. Corporate employees were asked to work from home both on Thursday and Friday this week.
The move comes after six consecutive quarters of declining same-store sales, with the chain also struggling to manage rising labour costs, climbing coffee prices and increased competition from smaller chains.
Niccol said in the filing that “These steps are to reinforce what we see is working and prioritize our resources against them.”
Earlier this year, Starbucks laid off 1,100 corporate employees as part of the CEO’s efforts to dramatically streamline operations.
The sources: Starbucks SEC filing, WSJ
