Seattle, WA – Starbucks is undergoing significant operational changes as CEO and President Brian Niccol announced on Thursday that the company will cut nearly 900 jobs and close several underperforming stores across the U.S. and Canada. These decisions are part of a larger restructuring plan aimed at making Starbucks “better, stronger, and more flexible.”
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What Happened
The announcement follows a comprehensive review of Starbucks’ North American operations, including store performance, physical locations, and financial results. Niccol did not specify the exact number of store closures but confirmed that the number of Starbucks locations in North America will decrease by nearly 1% in fiscal year 2025.
Despite these closures, Starbucks plans to continue expanding. By the end of fiscal year 2024, Starbucks expects to operate approximately 18,300 stores worldwide, compared to 18,424 stores last year. Niccol reassured employees and stakeholders that Starbucks will continue to invest in new initiatives and other growth areas.
Who Is Affected
The job cuts will primarily target non-retail roles, with about 900 positions being eliminated. Affected employees will be informed on Friday. Starbucks has promised a generous severance and support package, which includes extended benefits. Employees who are not required to work onsite have been asked to work remotely on Thursday and Friday during the transition process.
What’s Next
These changes are part of Starbucks’ “Back to Starbucks” plan, initiated by Niccol upon becoming CEO in September 2024. The plan focuses on improving the in-store experience, drawing customers back to Starbucks locations, and reinforcing Starbucks’ identity as a “Community Coffeehouse.”
The overhaul is estimated to cost around $1 billion, including $450 million for lease terminations and $150 million for severance and restructuring costs.
Public and Employee Reactions
The announcement has drawn mixed reactions, especially among employees affected by the job cuts. Niccol acknowledged the difficulty of these decisions, stating: “I know that these decisions affect our partners and their families, and we did not make them lightly.” He emphasized that the changes are necessary to strengthen the company’s future and create more opportunities for employees.
Starbucks remains committed to community building and sustaining long-term growth. The company will continue to monitor results and adjust strategies as needed in the coming months.
Conclusion
Starbucks’ restructuring reflects the company’s response to changing market conditions and a competitive retail environment. While the job cuts and store closures are difficult decisions, Starbucks aims to strengthen its operations and deliver a better experience for customers and partners alike.