Starbucks is set to lay off approximately 900 non-retail workers and shut down several stores in the U.S. and Canada as part of its restructuring efforts. The Seattle-based coffee chain will inform affected employees about their job cuts early Friday and intends to close an unspecified number of locations across North America in the near future.
A spokesperson for Starbucks Canada confirmed the development but did not disclose the exact number of Canadian employees impacted or specify which Canadian stores would be closing. According to a letter from Starbucks CEO Brian Niccol, a review of the company’s store network revealed underperforming locations that do not meet financial targets or deliver the expected customer experience.
Niccol emphasized that the decision to close stores is part of the company’s annual practice based on various factors such as financial performance and lease agreements. While acknowledging the impact on both employees and customers, he highlighted the significance of Starbucks stores as community hubs and expressed the difficulty in closing any location.
Starbucks projected that by the end of the fiscal year, it would have 18,300 stores in North America, representing a decrease of 124 stores compared to the previous year. This reduction in store count is uncommon for Starbucks within a fiscal year. Niccol, known for his expertise in leading turnarounds, was appointed to rejuvenate the Starbucks brand a year ago.
During his tenure at Chipotle, where he served as CEO for approximately six years, Niccol successfully doubled the company’s revenue and profit, leading to a significant increase in its stock price. Starbucks assured that affected employees would receive severance packages and support as part of the layoff process.