Like many restaurant and retail chains, Starbucks isn’t doing so hot right now, despite it being pumpkin spice latte season. The international coffee shop giant just announced that it’s laying off employees and closing restaurant locations, without giving much notice. Here’s what we know about layoffs, closures, and what it might mean for customers.
Why Is Starbucks Laying Off Employees?
People aren’t buying Starbucks as much as they used to, and the company reported six straight quarters of lower same-store sales, according to the Associated Press. That has led the company to institute a transformation strategy earlier this year, and these layoffs are part of that effort to “build toward a better Starbucks,” said Starbucks CEO Kevin Johnson, who is now Brian Niccol. Laid-off employees will receive severance, support packages, and benefits extensions.
How Many Employees Is Starbucks Laying Off?
In a letter sent to Starbucks employees this week, Niccol said that 900 employees will be laid off on Friday morning, September 26. The layoffs will affect only corporate employees, not store workers. Employees who could work from home were asked to do so on Friday.
This is the second round of corporate layoffs for Starbucks this year. In February, the company laid off 1,100 employees globally and eliminated hundreds of open positions. It also follows news last month that Starbucks is closing or converting its pickup-only stores.
Why Is Starbucks Closing Locations?
In addition to the layoffs, Starbucks is closing coffee shop locations as part of the same overall strategy. Stores that will close were identified as locations “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance,” the company said in a statement.
Which Starbucks Locations Are Closing and When?
While there was no specific number of closing locations, Starbucks did say that 1% of its shops would be closing, estimating that there would be 18,300 locations across the U.S. and Canada by the end of the year. As of June, the company had 18,734 locations, according to the Associated Press. It’s probably safe to say that there will be around 200 locations closing or more.
There is no set date for the closings, but Starbucks locations that are being shuttered will be informed of the plans this week. Employees of the closing stores will be transferred to other nearby locations where possible, or will be offered severance packages.
More Retail News From Cheapism
- Kroger Laying Off 1,000 Workers and Closing 39 Locations — Here’s the complete list of Kroger-owned grocery store closures, along with the latest news that the company is laying off employees.
- Cracker Barrel’s Maple Street Biscuit Company to Close 14 Locations — Only six years into its ownership of Maple Street Biscuit Company, Cracker Barrel has begun to close locations. Here’s what customers should know.
- Fast-Food Salad Chain Closes Dozens of Locations — Salad and Go is closing dozens of restaurant locations without warning, leaving people without a healthy alternative to the big burger chains.
