SEATTLE (dpa-AFX) - Coffee giant Starbucks Corp. (SBUX) Thursday announced a $1 billion restructuring plan involving the closure of coffeehouses and around 900 job cuts, as part of its 'Back to Starbucks' strategy.'
In a filing with the U.S. Securities and Exchange Commission, the company said it estimates the $1 billion restructuring to be related to the store closures, support organization transformation, and other restructuring activities, with 90% of the expenses attributable to the North America business.
In a letter to all North America Partners, Chairman and Chief Executive Officer Brian Niccol said the overall company-operated count in North America will decline by about 1% in fiscal year 2025 after accounting for both openings and closures.
The company plans to end the fiscal year with nearly 18,300 total Starbucks locations, company operated and licensed, across the U.S. and Canada.
In fiscal year 2026, Starbucks aims to grow the number of coffeehouses it operates. Over the next 12 months, the firm also plans to uplift more than 1,000 locations.
Niccol added that the partners in coffeehouses scheduled to close will be notified this week, and they will be offered transfers to nearby locations where possible.
The company will also offer partner care including comprehensive severance packages to those who cannot be immediately placed.
The company added that the planned job cuts will be in current non-retail partner roles.
The firm said it expects that a majority of the store closures will be completed by the end of this fiscal year.
The company further expects that a significant portion of these charges will be incurred in fiscal year 2025.
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