Starbucks has announced plans to cut around 900 jobs and close approximately 100 cafes across North America as part of a $1bn restructuring plan aimed at reviving the struggling coffee chain. The company, which eliminated 1,100 corporate positions earlier this year, will also close 'many' open or vacant positions, notifying affected employees on Friday.
The 900 staff affected work in 'non-retail' roles, and the closures represent about 1% of the coffee houses Starbucks operates in North America. The move comes after six consecutive quarters of falling US sales, as consumers, facing higher inflation, reconsider spending on pricey coffees.
Starbucks CEO Brian Niccol said the cuts are designed to 'reinforce what we see is working and prioritize our resources against them.' He added that the steps are necessary to build a 'better, stronger, and more resilient Starbucks.' However, Starbucks Workers United, a union representing workers at hundreds of stores, criticised the move, stating it 'makes it clear things are only going backwards' and that fixing the company's problems requires centering the people who engage with customers daily.
About 90% of the restructuring cost will be borne by the North American business, with $150m in employee separation costs and $850m related to store closures. Starbucks also plans to 'uplift' more than 1,000 store locations in the next 12 months to introduce 'greater texture, warmth and layered design.'
Niccol did not mention union organising efforts in his letter. More than 650 Starbucks stores in the US have unionised, and negotiations faltered after Niccol became CEO in September. The union launched its largest strike in December and has threatened further action. Starbucks shares fell 1% following the announcement.
