Starbucks to cut 900 jobs and close dozens of North American stores as sales struggle

"The latest cuts are designed to reinforce what we see is working and prioritize our resources against them, Starbucks CEO Brian Niccol wrote in a letter to employees on 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."

"Starbucks attributed about 90% of the restructuring cost to its North American business, with $150m expected in employee separation costs and $850m in costs related to store closures. Starbucks also plans to uplift over 1,000 store locations in the next 12 months, Niccol added, to introduce greater texture, warmth and layered design."

"But Starbucks Workers United, a union representing workers at hundreds of its stores, said the move makes it clear things are only going backwards at the chain. Fixing what's broken at Starbucks isn't possible without centering the people who engage with the company's customers day in and day out, it said. In his letter, Niccol did not mention the union organizing efforts at Starbucks. Over 650 Starbucks stores in the US have unionized, with workers pushing for a first union contract."

Starbucks will lay off around 900 non-retail employees and close about 100 cafes across North America under a $1bn restructuring plan. The company previously eliminated 1,100 corporate positions this year and will close many open or vacant positions. US sales have fallen for six straight quarters as consumers face higher inflation and curb spending on premium coffee. The restructuring assigns about 90% of costs to North America, with $150m for employee separations and $850m for store-closure expenses. The company plans to uplift over 1,000 store locations in the next 12 months. Union representatives criticized the cuts while over 650 US stores have unionized.

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