Starbucks' Strategic Realignment: Branch Closures and Layoffs Announced

Starbucks is planning a comprehensive restructuring of its business, which will lead to the closure of numerous stores and the layoff of nearly 1,000 employees. These measures are part of an ambitious program deemed necessary by CEO Brian Niccol. The initial closures will commence immediately, with affected employees already informed. The management has set the objective of addressing the challenges of a weakening business, following the dismissal of over 1,000 company employees earlier this year. The current wave of layoffs exclusively affects employees outside the sales areas. Although the exact number of stores to be closed has not been specified, it is expected that Starbucks will end the fiscal year with approximately 18,300 stores in the U.S. and Canada. This number is slightly below the 18,734 stores the company had operational in June. The restructuring costs amount to about $1 billion, including $150 million for severance packages and $850 million to cover closures and lease terminations. The locations to be closed either do not meet financial expectations or do not correspond to the physical ambiance desired by Starbucks. Employees from the affected stores have the opportunity to transfer to nearby locations. CEO Niccol, appointed last year, is known for his expertise in corporate restructuring, which he has already demonstrated at Chipotle and Taco Bell. Starbucks' latest business figures reveal a complex situation: while comparable sales in North America have declined by 2%, net income worldwide has increased by 2%.