Starbucks Cutting Staff, Stores

Starbucks (Seattle) is continuing its turnaround efforts by closing stores and cutting corporate staff. Chairman and CEO Brian Niccol outlined those steps and the reasons behind them in a letter to employees posted on the company’s website. As a result, the company also said it would take a $1 billion charge for the expenses involved.

“As we approach the beginning of our new fiscal year, I’m sharing two decisions we’ve made in support of our [ongoing] Back to Starbucks plan,” Niccol wrote. “Both are grounded in putting our resources closest to the customer so we can create great coffeehouses, offer world-class customer service and grow the business.”

First, he said, after a lengthy review of its existing cafes, “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.”

Though Niccol did not say just how many locales would be shuttered, The New York Times placed that number at about 400, based on Starbucks’ disclosures about the size of its past and current store fleet of about 18,300 in the U.S. and Canada. The closings are slated to start this weekend.

On a brighter note, Niccol said that over the next 12 months, the company plans “to uplift more than 1000 locations to introduce greater texture, warmth and layered design.”

As for the staffing cuts, all involve what Niccol described as “non-retail partner roles,” along with not filling any open positions along those lines.