The US multinational coffee chain, Starbucks, will cut jobs and close some stores as part of a $ 1 billion restructuring plan, CEO Brian Niccol said Thursday in a note to employees.
The company will fire 900 employees in its North America stores. The closures will reduce the total number of Starbucks locations in the region by approximately 1% this fiscal year, after taking into account the new openings, Niccol said.
“While we are advancing well, there is much more to do to build a better, stronger and more resistant Starbuck,” Niccol said.
Starbucks actions increased slightly in the negotiation prior to the market after the ad.
The company has faced weaker sales in recent years as customers treated higher prices. Starbucks has reported six consecutive quarters of the decrease in sales of the same store, a key measure of the individual performance of the store over time.
In recent years, Starbucks has renewed many places to attract more customers. When checking its stores, the company found some where the updates were not possible, Niccol said.
“During the review, we identify coffee shops where we cannot create the physical environment that our clients and partners expect, or where we do not see a path to financial performance, and these locations will be closed,” said Niccol.
“Every year, we open and close coffee shops for a variety of reasons, from financial performance to the expiration of the lease. This is a more significant action that we understand that will affect partners and customers. Our coffee shops are community centers, and close any location is difficult,” he added.
At the end of fiscal year 2025, Starbucks hopes to operate 18,300 stores in the United States and Canada. The employees of the store marked for closing will be notified this week. The company said it will try to transfer the affected personnel to other places and that will otherwise provide “comprehensive compensation.”
(ABC News)
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