Guo Ji Jin Rong Bao·2025-09-26 12:32Core Viewpoint - Starbucks announced a plan to lay off 900 employees and close approximately 100 underperforming stores as part of a $1 billion restructuring effort aimed at reversing six consecutive quarters of declining sales [1][3]. Group 1: Restructuring and Cost-Saving Measures - The closures include the iconic Seattle roasting facility and will also affect locations in the UK, Switzerland, and Austria [1]. - The CEO, Brian Niccol, stated that the closing stores were unable to provide the expected environment for customers and employees or achieve profitability [1][3]. - This restructuring is part of a broader strategy initiated by Niccol after he took office, which includes previous layoffs of 1,100 positions earlier this year [3]. Group 2: Market Response and Analyst Opinions - Following the announcement, Starbucks' stock price fell by about 1% during the New York trading session, indicating a relatively mild market reaction [6]. - Some analysts maintain a positive outlook, suggesting that closing inefficient stores and improving resource utilization could enhance cash flow and future profit margins, with BTIG reaffirming a "buy" rating [6]. - Conversely, other analysts, such as TD Cowen, expressed caution, reiterating a "hold" rating and questioning whether the company can return to growth in its core business [6]. Group 3: Union and Labor Relations - Starbucks is facing a unionization movement among its baristas in the U.S., with significant strikes planned for December 2024, as employees demand a collective bargaining agreement [4]. - The union has raised concerns about understaffing and excessive workloads, opposing the company's restructuring announcement [4]. - Despite the company's commitment to "good faith negotiations," discussions have been stalled for nine months [4]. Group 4: Future Plans and Store Upgrades - Niccol emphasized a commitment to a $1 billion transformation of Starbucks, which includes closing stores lacking "tangible experiences and profitability pathways" [5]. - The total number of stores in the U.S. and Canada is expected to decrease from 18,734 to approximately 18,300, representing a net reduction of 1% in company-operated locations [5]. - Concurrently, over 1,000 core stores will undergo upgrades to enhance customer experience and operational efficiency, aiming to restore the "third place" coffee culture [5].