Starbucks to close hundreds of outlets and cut jobs in restructuring drive
The closures will also lead to the loss of roughly 900 jobs.
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Starbucks has announced a sweeping restructuring plan that will see hundreds of stores permanently shut and staff laid off, as the coffee chain battles falling demand and mounting costs.
In a regulatory filing on Thursday, the company confirmed it expects to incur around $1 billion in costs linked to the overhaul, aimed at reviving sales and profitability under chief executive Brian Niccol.
By the end of September, the group will close around 1% of its North American outlets — reducing its footprint from 18,734 stores at the end of June to about 18,300, according to CNN. The shuttered outlets, Niccol said in a letter to employees, were those “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance”.
The closures will also lead to the loss of roughly 900 jobs, with affected employees due to be notified on Friday. Staff are being promised “generous severance and support packages”, although the company confirmed that “many” open positions will also be closed. This marks Starbucks’ second wave of job cuts this year, following the loss of around 1,000 roles in February.
The restructuring comes amid slowing demand for premium coffee in the United States, where consumers have been cutting back on discretionary spending. At the same time, Starbucks is seeking to sell a stake in its China business, where competition has intensified and demand remains weak, as per a report by Reuters.
Shares in Starbucks were flat in pre-market trading, though the stock is down 7.7% so far this year, reflecting investor concerns over the brand’s performance.
