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Starbucks to sack hundreds of staff and close stores in major $1bn restructure
Starbucks have announced major changes to their North American operation with 900 jobs expected to be cut as well as a widespread cull of the coffee giant's locations
Starbucks have said it will close coffee stores and sack 900 people in a major $1billion restructuring plan.
The coffee giant's board approved the plan on Tuesday (September 23) which includes plans to close locations that do not support larger cafes and fail to meet financial performance targets.
The Seattle-based company expects to meet their closure targets by the end of the current fiscal year. The company estimates the restructuring plan will cost $1billion with 90% of the changes set to occur in North America.
Starbucks CEO Brian Niccol wrote a memo to employees on Thursday morning which read: "During the review, we identified coffeehouses where we're unable to create the physical environment our customers and partners expect, or where we don't see a path to financial performance, and these locations will be closed."
The plans include approximately $150 million being spent on employee separation benefits, $400 million for disposal and impairment of company-operated store assets and $450 million primarily for accelerated amortization of right-of-use lease assets and other lease costs from early store closures., according to StreetInsider.
The coffee chief did not say how many stores would be closed but did say overall there would be a 1% decline.
Experts have warned of a global “coffee crisis” as key factors cause hikes in hot drinks prices. The statements come after two major coffee roasters in Brazil, one of the world’s largest coffee producers, were forced to push up prices on the drink by as much as 15%, citing rising production costs for raw beans, market volatility and climate issues.
Elsewhere, global prices for raw arabica beans – the most popular type of coffee in the world – have skyrocketed by 20% this year after having already increased by over 80% in 2024, with crop-fields being crippled by worrying weather and worsening rain.
Now “roasters all over the world will be facing pressure to raise prices,” experts say. The adverse effects are already being felt in the UK, where the price of coffees increased by 5% last year, double the rate of inflation.
Shoppers have complained that some chains are now selling takeaway coffees for over a fiver: Black Sheep Coffee charges £5.10 for a large flat white, while some Starbucks stores dish out XL drinks above the £5 threshold.
Daily Star Sunday
Starbucks have announced major changes to their North American operation with 900 jobs expected to be cut as well as a widespread cull of the coffee giant's locations
Starbucks have said it will close coffee stores and sack 900 people in a major $1billion restructuring plan.
The coffee giant's board approved the plan on Tuesday (September 23) which includes plans to close locations that do not support larger cafes and fail to meet financial performance targets.
The Seattle-based company expects to meet their closure targets by the end of the current fiscal year. The company estimates the restructuring plan will cost $1billion with 90% of the changes set to occur in North America.
Starbucks CEO Brian Niccol wrote a memo to employees on Thursday morning which read: "During the review, we identified coffeehouses where we're unable to create the physical environment our customers and partners expect, or where we don't see a path to financial performance, and these locations will be closed."
The plans include approximately $150 million being spent on employee separation benefits, $400 million for disposal and impairment of company-operated store assets and $450 million primarily for accelerated amortization of right-of-use lease assets and other lease costs from early store closures., according to StreetInsider.
The coffee chief did not say how many stores would be closed but did say overall there would be a 1% decline.
Experts have warned of a global “coffee crisis” as key factors cause hikes in hot drinks prices. The statements come after two major coffee roasters in Brazil, one of the world’s largest coffee producers, were forced to push up prices on the drink by as much as 15%, citing rising production costs for raw beans, market volatility and climate issues.
Elsewhere, global prices for raw arabica beans – the most popular type of coffee in the world – have skyrocketed by 20% this year after having already increased by over 80% in 2024, with crop-fields being crippled by worrying weather and worsening rain.
Now “roasters all over the world will be facing pressure to raise prices,” experts say. The adverse effects are already being felt in the UK, where the price of coffees increased by 5% last year, double the rate of inflation.
Shoppers have complained that some chains are now selling takeaway coffees for over a fiver: Black Sheep Coffee charges £5.10 for a large flat white, while some Starbucks stores dish out XL drinks above the £5 threshold.
Daily Star Sunday