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As part of a cost-cutting initiative, Starbucks plans to eliminate about 900 jobs in the US and close its weakest stores there, along with some closures in the UK. The company’s CEO highlighted that the revamp will reduce wait times and support a sales turnaround. This comes after Starbucks cut 1,100 jobs and streamlined its US menu earlier this year to address sluggish sales.
"This is a more significant action that we understand will impact partners and customers," chief executive Brian Niccol said, although the firm said it was still "on track" to open 80 new stores in the UK.
"While the EMEA [Europe, Middle East and Africa] business is on track to meet its commitment to open 80 new stores in the UK and 150 across EMEA this financial year, some stores in the UK, Switzerland and Austria will close as a result of this portfolio review", Starbucks said.
Mr Niccol said in a letter to employees that the stores marked for closure were "unable to create the physical environment our customers and partners expect, or where we don't see a path to financial performance".
Starbucks said the US jobs set to be cut would be support staff roles.
In July, the coffee chain reported its sixth consecutive quarterly drop in sales at stores open at least a year in the US - its biggest and most important market. The company's shares have fallen more than 8% so far this year.
Mr Niccol joined Starbucks as its chief executive last year, on the heels of a six-year stint at at the helm of Chipotle Mexican Grill. During his tenure there, the fast-casual burrito chain nearly doubled its sales.
The latest store closures and layoffs at Starbucks are part of Mr Niccol's wide-ranging turnaround strategy in his first year at the company, as the chain tries to lure back dissatisfied customers. His efforts have included remodelling stores to revamp seating and bringing back self-service condiment bars.
