Starbucks is preparing to lay off about 900 employees as part of a sweeping restructuring effort that includes closing underperforming stores across North America. The move is part of a $1 billion strategy to streamline operations and refocus resources on stores with stronger growth potential.
The company, led by CEO Brian Niccol, has spent the past year revamping its locations to encourage customers to linger longer, with updates including redesigned interiors and expanded seating. However, a recent review identified coffeehouses where renovations would not bring financial improvement or where long-term profitability appeared unlikely. Those locations are set to close, affecting hundreds of service roles.
The job cuts represent roughly 1% of the company’s 18,734 North American stores, with the total expected to fall to around 18,300 by the end of the fiscal year. While annual store closures are common for Starbucks, company leaders acknowledged this round will have a more significant impact on employees and communities.
Workers affected by the layoffs are receiving notices this week. Some may be offered positions at nearby locations, while others will be provided severance packages. Starbucks also confirmed that many open positions will remain unfilled, reinforcing speculation of a broader hiring slowdown.
The restructuring comes amid rising tensions between Starbucks and its workforce. Baristas have raised concerns about shifting dress codes, stalled union negotiations, and increasingly complex drink orders. While the company has emphasized its commitment to front-line employees as part of its turnaround plan, critics argue that workplace dissatisfaction remains a challenge.
For Starbucks, the strategy strikes a balance between enhancing customer experiences and maintaining financial performance. Store closures and layoffs are expected to free up resources for investments in remodeling and enhancing existing coffeehouses, though the changes will test the company’s ability to maintain employee morale.
Source: HR Digest