Starbucks on Thursday announced plans to close underperforming stores in North America this weekend, as the coffee giant intensified its turnaround effort.
Along with the store closures, the company said it would lay off about 900 corporate staff, in addition to the 1,100 jobs the company cut earlier this year. The company said it would take a $1 billion charge for the expenses associated with the latest store closures and layoffs.
In a letter to staff, Brian Niccol, who just marked his one-year anniversary as chief executive of Starbucks, said the locations that would be shuttered were “coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”
Starbucks said it would end the fiscal year, which concludes this weekend, with 18,300 stores across North America. In June, the company said it had 18,734 stores, suggesting around 400 stores would close. The company declined to confirm a figure.
Since Mr. Niccol arrived at Starbucks from Chipotle, he has been moving quickly to try to put the coffeehouse on a better financial footing. In July, Starbucks reported its sixth consecutive quarterly decline in sales at stores open for at least a year. The company’s shares have fallen about 12 percent in the past year.
The company said it would notify employees at the stores that are scheduled to close this week and hoped to offer transfers to nearby locations, where possible.
The company told corporate employees to work from home for the rest of the week. Those affected by the layoffs would be notified Friday morning.
In his letter, Mr. Niccol said the company’s turnaround strategy was showing early results. Still, the cuts were necessary “to reinforce what we see is working and prioritize our resources against them.”
The moves were not made “lightly,” he added. “I believe these steps are necessary to build a better, stronger and more resilient Starbucks.”
Julie Creswell is a business reporter covering the food industry for The Times, writing about all aspects of food, including farming, food inflation, supply-chain disruptions and climate change.
The post Starbucks to Cut Jobs, Close Stores and Take $1 Billion Hit in Revamp Effort appeared first on New York Times.
