Starbucks will allocate $ 1 billion for restructuring, including closing over 100 cafes in North America and reduction of full -time jobs outside stores. About 900 employees have already been released, subsequent layoffs are on the road.
The company slows down the pace of opening and focuses on renovations and modernization of over 1,000 existing premises, wanting to restore the role of “third place” (in the assumption: the first is the house, the second workplace). The purpose of the changes is to improve customer experience, increase efficiency and reverse sales drops on the company's largest market.
The company reported in the application to the American Commission of Securities and Exchange that 90 percent expected costs of restructuring in the amount of approximately $ 1 billion. It will fall on North America. This amount is located approx. $ 150 million Employee check -in costs and approx. $ 850 million fees related to closure and changes in the store's portfolio.
A significant part of the accounting charges will appear in the fiscal year 2025. The goal is to move the investment “Closer to the cafe and customer” and to reverse sales drops on the company's largest market, where Sales are already decreasing the sixth quarter in a rowunder the pressure of sharper competition and more sensitive to consumer prices.
Check also: Gazprom sells its shares in this country. Fear of American sanctions
Starbucks is in trouble. This is not the first time
This is the second wave of full -time cuts since the rudder is taken by President Brian Nical – earlier this year 1.1 thousand were released corporate employees. Starbucks ended 2024 with approx. 16 thousand people employed outside the premises. “These steps are to strengthen what works and focus our resources there,” Niccol wrote in a letter to employees. “I believe that it is necessary to build a better, stronger and more resistant Starbucks, which will have a greater impact on the world and create more opportunities for our partners, suppliers and community,” he added.
Special offer
In accordance with the company's announcement, First of all, cafes will be closed, which cannot be adapted to customer expectations and employees in terms of space and atmosphere or in which there is no way to satisfying financial results.
At the same time, Starbucks slows down the pace of opening for renovations of existing locations. Refreshed cafes are to encourage longer visits, returning to the idea of ”third place” – outside the home and office. Over the next 12 months, the company plans to modernize over a thousand points, and in fiscal years 2026 again wants to increase the number of cafes it manages.
For closed cafe employees It is foreseen to transfer to nearby locations, and where it will not be immediately possible – check and support packages. In the case of non -noretail full -time, reductions will also include closing many vacancies, and people whose positions have been liquidated will receive “generous” severance pay and extended benefits. At the time of the changes to the changes, office workers, whose presence is not necessary, were asked to work.
Read also: ETF or etc. We explain what debt papers are listed on the stock exchange and when it is worth getting interested in them [PORADNIK]
The network is losing full -time
Restructuring goes hand in hand with investments in front operations. In July, Starbucks announced the largest program in history to improve work and service standards, “Green Apron Service”, covering over $ 500 million. as part of additional working hours in cafes belonging to the company. The company reports that In places where the cast was increased in the peaks and the decor was refreshed, transactions and sales are growingservice times are shortening, and employees' satisfaction is higher.
Strategic changes also apply to work organization and culture. From next month Starbucks returns to a four -day presence in the office for roles that require this. Niccol also completed a new management team, which was joined by, among others Financial Director of Cathy Smith, global boss of Tressie Lieberman and operational director Mike Grams – managers with whom he previously worked in Chipotle and Yum Brands.
After the plan was announced, the company's shares remained in the morning without major changes in pre -sess trade, although Since the beginning of the year, the exchange rate has fallen by over 8 percent.
From the market perspective, it will be important whether after a temporary approach in the books of about $ 1 billion. The costs of restructuring Starbucks will achieve the intended goal, which is a permanent improvement in customer experience and network profitability. “I hope that we are heading towards being the best customer company company, the most -oriented company,” Niccol recently said in an interview with CNBC.
In a letter to employees, he emphasized that “strengthening what works” is to help the company return to Starbucks former splendor ” – a brand whose foundation is friendly, lively cafes and repetitively good service. If this plan is successful, the company will end the fiscal year with nearly 18.3 thousand locations in the US and Canada (including its own and franchise), and the following year will go on growth.
