Starbucks, which has faced challenges in recent years, announced it will close a number of stores as part of a broader restructuring effort.
CEO Brian Niccol outlined the plan on Thursday, confirming that hundreds of locations – roughly one percent of the chain’s footprint – will shut down this month.
The restructuring, projected to cost $1 billion, also includes a second round of layoffs at the company’s headquarters.
About 900 corporate employees will be let go, following an earlier round in February that eliminated 1,000 positions.
Workers impacted will be informed Friday and offered “generous support and severance packages.”
In a letter to employees, Niccol explained the closures are targeted at locations that can no longer deliver the kind of experience expected by customers and staff.
Still, Starbucks emphasized that it remains focused on growth, with plans to remodel more than 1,000 stores.
The redesigned spaces will feature additional power outlets, softer seating, and a warmer color scheme.
Although the closures will be completed before the company’s fiscal year ends next week, leadership stressed that the revamp is intended to better position Starbucks for the future.
Niccol acknowledged that these changes will impact employees and their families but emphasized that the decisions were made carefully.
He believes the steps are essential to creating a stronger, more resilient company – one that can continue making an impact worldwide.
Efforts to Revive the Coffee Chain
Niccol took over as CEO a year ago with the goal of revitalizing the struggling brand.
Despite his best efforts, however, sales have yet to improve, and the company’s stock has fallen 12 percent.
Since then, he has trimmed the menu by 30 percent while adding trendy options such as coconut water and protein toppings.
The food lineup has also been refreshed, with new croissants and other baked pastries. In addition to the planned remodels, Starbucks has also rolled out features like self-serve milk and sugar stations and even added playful doodles to coffee cups.
To highlight its roots in coffee, the company also rebranded from Starbucks to Starbucks Coffee Company.
However, the recent changes have sparked controversy, with some baristas protesting new uniform policies that have even resulted in lawsuits.
Several of the new drinks have also drawn criticism from staff, who say the overly complicated recipes create unnecessary stress and are difficult to manage during peak hours.
