Starbucks will be closing hundreds of stores and laying off hundreds of employees in Canada and the United States, according to an announcement on Thursday.
In a message to employees, Starbucks CEO Brian Niccol shared two decisions the company has made in support of its “Back to Starbucks” plan.
After reviewing the coffee chain’s North America portfolio, Niccol said they identified stores that weren’t performing well financially.
“These locations will be closed,” he wrote. “Each year, we open and close coffeehouses for a variety of reasons, from financial performance to lease expirations. This is a more significant action that we understand will impact partners and customers.”
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The CEO stated that the company will be closing about one per cent of Starbucks locations across Canada and the U.S. At the end of June, the company had 18,734 stores in North America. According to Niccol, this will be cut down to 18,300 stores by the end of September.
In an email to Daily Hive, a Starbucks spokesperson said they could not share specific details regarding the store closures in Canada.
Niccol offered some reassurance to employees, whom they call “partners,” working at retail locations.
“Partners in coffeehouses scheduled to close will be notified this week. We’re working hard to offer transfers to nearby locations where possible and will move quickly to help partners understand what opportunities might be available to them,” he stated.
The coffee chain employs about 20,000 people in Canada. The CEO said that employees who can’t be immediately placed at another location will receive comprehensive severance packages.
“We also hope to welcome many of these partners back to Starbucks in the future as new coffeehouses open and the number of partners in each location grows,” he added.
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On top of store closures, Starbucks also announced that it would lay off approximately 900 current corporate employees and close open positions in Canada and the U.S.
“Non-retail partners whose roles are being eliminated will be notified tomorrow morning (Friday),” stated Niccol. “We will offer generous severance and support packages, including benefits extensions.”
The company has asked corporate employees to work from home on Thursday and Friday, unless their job specifically requires them to be in the office.
“I know these decisions impact our partners and their families, and we did not make them lightly,” said Niccol. “I believe these steps are necessary to build a better, stronger, and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers, and the communities we serve.”
He ended the letter by thanking employees who will be laid off.
These layoffs are in addition to the 1,000 job cuts the retailer made in February.