Starbucks said Thursday it’s closing hundreds of U.S. and Canadian stores and laying off 900 nonretail employees so it can focus resources on its turnaround plan.
Starbucks said Thursday it’s closing hundreds of U.S. and Canadian stores and laying off 900 nonretail employees as it focuses more of its resources on a turnaround.
The Seattle coffee giant said store closures would start immediately. The company wouldn’t give a number of stores that are closing, but it said it expects to have 18,300 North American locations when its fiscal year ends on Sunday. As of June 29, the company had 18,734 locations.
In a research note Thursday, TD Cowen analyst Andrew Charles estimated Starbucks will close around 500 stores in its fiscal fourth quarter.
Starbucks said workers in its stores will be offered transfers to other locations where possible and severance packages.
Starbucks said it will notify nonretail employees whose positions are being eliminated early Friday. Starbucks asked employees who can work from home to do so on Thursday and Friday.
In a letter sent to employees Thursday, Starbucks Chairman and CEO Brian Niccol said a review of the company’s stores identified locations where the company doesn’t see a path to financial stability or isn’t able to create the physical environment customers expect. Those stores are being closed.
“Each year, we open and close coffeehouses for a variety of reasons, from financial performance to lease expirations,” Niccol wrote.
