By Steve Gill, editor and publisher of Tristardaily.com
Starbucks is taking “important action” to announce another layoff at its headquarters as part of its efforts to turn its struggling business around, close a number of stores and revive the fate of CEO Brian Nicole’s struggle brand. Like the recent store changes that have been reversed with cracker barrels, Starbucks’ new designs, including many in Tennessee, have produced many customer rejections.
Nicole announced Thursday that Starbucks will close hundreds of stores this month, or about 1% of those locations. The company said it will have 18,734 North American locations at the end of June and will end in September with 18,300 stores.
The company expects the restructuring effort to cost $1 billion.
In a letter to employees, Niccol said the company has received reviews of its footprint and that the locations that will be closed are “where customers and partners don’t see the path to financial performance that they expect.”
Starbucks often closes locations for a variety of reasons, including poor performance. However, Nicole said this massive effort was even more important.
“This is a more important action to understand that we are impacting our partners and customers. Our coffee shops are central to our community and it’s difficult to close our location,” he said.
Despite hundreds of closures coming into place by the end of the company’s fiscal year next week, Starbucks said it will return to growth mode and plans to remodel more than 1,000 locations. Starbucks’ new look comes with cozy chairs, more power outlets and warm colours. This new plan represents a dramatic reversal of Starbucks’ recent redesign changes. This has shifted to eliminating the traditional coffee shop atmosphere and replacing them with quick pickup locations.
In addition to the store closures, Starbucks announced about 1,000 layoffs in February, plus 900 more corporate layoffs. Affected employees will be notified on Friday and receive a “generous retirement and support package.” He also announced that “many” open positions will be closed.
“We know that these decisions will affect our partners and their families. We didn’t lighten them,” writes Nicole. “I think these steps are necessary to build a stronger, stronger, more resilient Starbucks than it deepens its impact on the world and creates more opportunities for the partners, suppliers and the communities we serve.”
Nicole joined Starbucks about a year ago and wanted to revive the renowned coffee chain. However, financial results have declined by approximately 12%, so the financial results have not been realized and sales remain the same.
He cut the menu by about 30%, but also introduces new items to keep the brand trending, such as protein toppings and coconut water. The food has also been revamped as new croissants and baked goods are available.
In addition to the modifications, it integrates a smaller touch, such as bringing home self-service milk and sugar stations. The company has also tweaked the name to “Starbucks Coffee Company” to strengthen its coffee roots.
His previous changes sparked a backlash from some baristas, particularly the uniform changes that have filed lawsuits. And some new drinks have generated complaints from baristas that they are overly complicated.
Starbucks also got temporarily caught up in the Charlie Kirk controversy when the barista wrote a hateful message to the customer’s cup. The employee was fired quickly, but the story created national news.
