Starbucks Announces Store Closures and Job Cuts

Starbucks has announced a significant restructuring plan, involving the closure of underperforming stores in the United States and the United Kingdom, alongside the elimination of approximately 900 US jobs. This strategic move is part of a comprehensive cost-saving initiative aimed at revitalizing sales and reducing customer wait times in its primary market.

The coffee giant had previously disclosed in February its intention to streamline operations by simplifying its US menu and cutting 1,100 jobs to address flagging sales. While some stores in the UK, Switzerland, and Austria are slated for closure, Starbucks maintains its commitment to opening 80 new stores in the UK this fiscal year.

CEO Brian Niccol elucidated that the stores targeted for closure were those unable to cultivate the desired physical environment for customers and partners, or where a path to financial viability was not apparent. This restructuring is part of Niccol's broader turnaround strategy, which includes store remodeling and the reintroduction of self-service condiment bars.

Analysts have noted that despite these aggressive measures, Starbucks faces mounting competition from drive-through coffee shops and a deteriorating brand perception. Additionally, the company is grappling with a unionization campaign among its US baristas, with Workers United voicing concerns about understaffing and overwhelming workloads.