Starbucks has announced plans to cut around 900 jobs and close approximately 100 cafes across North America as part of a $1bn restructuring plan. The move comes after six consecutive quarters of declining sales in the US, with consumers cutting back on expensive coffee amid high inflation.
The affected employees work in non-retail roles, and the company will also eliminate many open or vacant positions. The closures represent about 1% of the coffee houses Starbucks operates in North America. The restructuring follows earlier cuts of 1,100 corporate positions this year.
Starbucks CEO Brian Niccol stated that the steps are necessary to build a stronger company and create more opportunities. However, Starbucks Workers United, a union representing workers at hundreds of stores, criticised the move, saying it shows things are going backwards and that fixing the company requires centering on workers.
About 90% of the restructuring cost will be attributed to North America, with $150m for employee separation and $850m for store closures. Starbucks also plans to upgrade over 1,000 store locations in the next 12 months.
Niccol did not address union organising efforts in his letter. More than 650 US Starbucks stores have unionised, and negotiations have stalled since Niccol became CEO last September. The union has threatened further strikes to push for a first contract.
