Starbucks announces $1B restructuring plan, layoffs and store closures

Core Viewpoint - Starbucks is implementing a $1 billion restructuring plan, which includes laying off approximately 900 non-retail employees and closing some North American stores to address a sales slump in its largest market, the US [1][2]. Group 1: Restructuring Plan - The restructuring plan will result in a 1% decline in the number of company-operated stores in North America for fiscal year 2025, factoring in both openings and closures [2]. - About 90% of the $1 billion restructuring costs are expected to be related to the North America business, with a significant portion of these expenses incurred in fiscal year 2025 [2]. - The CEO emphasized prioritizing investments closer to the coffee house and customer to reverse the ongoing sales decline [2]. Group 2: Sales Performance - Store sales have been negative for six consecutive quarters, indicating a persistent downturn in performance [3]. - The current CEO, Brian Nickel, has been in the role for over a year and has already conducted two rounds of layoffs, including a previous elimination of 1,000 positions primarily at corporate headquarters [3]. Group 3: Investment and Strategy - A $500 million investment is being made into labor and hospitality, focusing on the Green Apron service model, which is considered one of the largest investments in labor and hospitality in the company's history [4][6]. - The turnaround effort is described as a multi-year process, with no specific timeline provided for when improvements are expected [5]. Group 4: Market Reaction - Following the announcement of the restructuring plan, Starbucks stock initially rose slightly but later turned lower, reflecting market uncertainty about the effectiveness of the turnaround strategy [4].