Starbucks has revealed significant changes to its operations, which include the closure of various stores and job reductions as part of a comprehensive restructuring strategy. CEO Brian Niccol announced that the company will shut down hundreds of cafés this month, which represents approximately 1% of its North American outlets. By the end of September, Starbucks will operate around 18,300 locations, a decrease from 18,734 in June. The closures will primarily target underperforming locations that have struggled to meet customer expectations or financial targets. Starbucks acknowledged the difficulty of these decisions, given that its cafés serve as community gathering places, but deemed them essential for the company’s future.
In conjunction with the closures, Starbucks will also implement layoffs affecting around 900 corporate staff, in addition to the 1,000 layoffs that occurred earlier this year. Numerous open positions will be eliminated as well. The company stated that impacted employees will receive severance and support packages. This initiative is part of a broader $1 billion plan to restructure operations. Despite the news of downsizing, Starbucks intends to remodel over 1,000 locations with a focus on warmer aesthetics, increased power outlets, and more inviting seating arrangements. The company remains committed to growth following the completion of the restructuring process. Niccol, who assumed the role of CEO about a year ago, has been focused on revitalizing the brand.
Changes implemented include menu simplification, the addition of new food items like croissants and baked goods, as well as the introduction of popular products such as protein toppings and coconut water. Other minor adjustments, like reinstating self-serve milk stations and doodled coffee cups, have also been made. However, not all changes have received positive feedback; some baristas have raised concerns about new drink complexities and uniform alterations, with at least one lawsuit filed against the company. This update indicates that Starbucks is making challenging decisions now to pave the way for a more robust future.
