Starbucks has announced a sweeping restructuring plan that will lead to the closure of underperforming stores and the elimination of hundreds of jobs across North America. The move is part of a one billion dollar cost cutting initiative aimed at stabilizing the company after six straight quarters of slowing US sales.
The coffee giant says about nine hundred corporate and support roles will be cut while around one percent of its North American stores will be closed. Executives emphasized that the closures will focus on locations where profitability is weak or where stores cannot deliver the customer experience the brand wants to maintain.
Even as some stores shut down Starbucks plans to remodel or upgrade more than one thousand locations in the coming years. Leadership has described the effort as a return to the company’s roots prioritizing core coffee offerings efficiency and an improved in store atmosphere.
The restructuring comes as inflation and shifting consumer habits have hurt demand for premium beverages and food items. Many customers are pulling back on frequent visits forcing the company to rethink its strategy. Investors and analysts will be watching closely to see if the changes help restore momentum.
The announcement has also stirred concern among employees. Labor groups have criticized the decision calling for more transparency and stronger protections for workers affected by the cuts.
Despite the shake up Starbucks leaders remain confident that the restructuring will put the company on a stronger long term footing. The challenge ahead will be balancing cost reductions with the brand’s reputation for consistency comfort and community — the qualities that made Starbucks a global name in the first place.