Starbucks is stepping up its turnaround efforts,
announcing plans to close underperforming stores in North America.
The Starbucks app will be updated Sunday to reflect stores that remain open, according to the company.
“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,” according to The New York Times. “The company said it would take a $1 billion charge for the expenses
associated with the latest store closures and layoffs.”
Starbucks ended 2024 with about 16,000 employees who work outside of store locations, according to CNBC.
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“These steps are to reinforce what we see is working and
prioritize our resources against them,” Starbucks CEO Brian Niccol wrote in a letter to employees Thursday. “I believe these steps are necessary to build a better, stronger, and more
resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers, and the communities we serve.”
Niccol just celebrated his
one-year anniversary with the company after arriving from Chipotle.
“The overhaul comes as part of Niccol's 'Back to Starbucks' plan, a strategy designed to revitalize its coffee shops and convince consumers to return to the
stores,” according to CBS News. “Although Starbucks remains
profitable, its sales have slowed amid heightened competition from rivals such as Dunkin’."
Despite the closures and layoffs, Starbucks says it will return to growth mode, and
it also plans to remodel more than 1,000 locations.
“The new look for Starbucks features cozier chairs, more power outlets and warmer colors,” according to CNN Business.