Seattle-based coffee giant Starbucks is planning to lay off 900 U.S. corporate staff members tomorrow morning, according to an open letter from CEO Brian Niccol.
“Unless your job specifically requires you to be on site in the office, we’re asking you to work from home today and tomorrow,” Niccol wrote in the letter, dated Sept. 25, adding that the company plans to “offer generous severance and support packages including benefits extensions.”
Additionally, the company is planning to close hundreds of stores throughout the United States as part of its “Back to Starbucks” strategy, which involves retail store staffing changes and interior design changes.
“I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol wrote (note: Starbucks refers to its employees as partners). “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.”
In the letter — titled “Message from Brian: An Important Update” — Niccol said a review of the company’s North American coffee shop portfolio identified stores that were “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”
As it closes those shops, Starbucks expects its company-operated North American store count to decline about 1% in fiscal year 2025. In a June filing, Starbucks said it had 11,453 company-operated stores in North America. Thus, a 1% drop would equate to a net loss of approximately 115 stores.
Niccol said that the company will be making an effort to relocate affected employees, who will be notified of store closings this week. For those people who cannot be relocated, Niccol said the company is “focused on partner care including comprehensive severance packages.”
On the corporate side, the company is “further reducing non-retail headcount,” including eliminating 900 positions and closing many open positions. The round of layoffs follows Starbucks’ elimination of some 1,100 additional jobs in February of this year.
All these decisions are part of Starbucks’ broader financial turnaround plan under the leadership of Niccol, who was appointed CEO one year ago.
“These steps are to reinforce what we see is working and prioritize our resources against them,” Niccol said. “Early results from coffeehouse uplifts show customers visiting more often, staying longer and sharing positive feedback. Where we’ve invested in more green apron partner hours so that there are more partners working at busy times, we saw improvements in transactions, sales and service times, alongside happier, more engaged partners.”
Comments? Questions? News to share? Contact DCN’s editors here. For all the latest coffee industry news, subscribe to the DCN newsletter.
Related Posts
