Starbucks to close stores, lay off 900 as part of overhaul

Core Insights - Starbucks is implementing significant cost-cutting measures, including laying off 900 corporate employees and closing an undisclosed number of stores across North America as part of a turnaround plan [1][2] - The company anticipates these actions will incur approximately $1 billion in costs related to severance payments, lease exits, and other store closure expenses [2] - CEO Brian Niccol emphasized that these steps are aimed at reinforcing successful strategies and reallocating resources effectively [2][3] Cost-Cutting Measures - The layoffs will be accompanied by the elimination of many open and unfilled positions [3] - The company is undergoing a major overhaul, with over 1,000 stores being remodeled at an estimated cost of $150,000 per store, aiming to create a more inviting atmosphere [4] - The number of company-operated stores is expected to decline by 1% this year, despite recent openings [4] Store Closures - Stores identified for closure were deemed unsuitable for the planned upgrades or lacking a viable path to financial performance [5] - Specific details regarding the number and locations of the stores to be closed have not been disclosed [4][5] Sales Performance - Starbucks has experienced six consecutive quarters of same-store sales declines [6] - To attract customers back, the company is reinstating pre-pandemic policies, such as hand-writing customer names on cups and offering free refills on certain orders [6] - The return of milk and sugar stations is expected to enhance customer experience and improve service efficiency [7]