Starbucks Closing Stores and Layoffs Workers As Part Of Restructuring Deal

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00:00Starbucks closing stores and layoffs workers as part of restructuring deal.

00:05Starbucks announced a $1 billion restructuring,

00:09planning to close hundreds of North American coffeehouses

00:11and lay off nearly 1,000 employees amid a steep sales decline.

00:16The plan, filed with the SEC, predicts around 500 net closures by fiscal 2025's end.

00:23Starbucks will maintain nearly 18,300 U.S. and Canadian cafes.

00:28The company also confirmed that approximately 900 corporate non-retail workers

00:33will lose their jobs starting Friday.

00:36Starbucks anticipates about $150 million in employee separation costs

00:41and $850 million in other restructuring charges.

00:45CEO Brian Nickel emphasizes closures are vital

00:48after some cafes didn't meet financial or customer standards.

00:52The closures and layoffs marked the second round of cuts under Nickel's leadership.

00:56Earlier this year, 1,100 corporate jobs were eliminated,

01:00affecting over 10% of Starbucks' 16,000 non-store employees.

01:05Falling same-store sales, increased competition,

01:08and cost-conscious customers challenged Starbucks as shares dropped by over 1%.

01:13The move follows other major initiatives.

01:16Nickel has rolled out, including Green Apron Service,

01:19pledging over $500 million in staffing hours across owned cafes.

01:23Starbucks has slowed store openings to remodel existing ones,

01:28restoring the brand's identity as a third place.

01:31Nickel hopes to welcome many back when Starbucks resumes expansion in fiscal 2026.

01:37Starbucks Workers United, representing over 12,000 baristas,

01:41plans to request bargaining over the closures,

01:43aiming for effects bargaining at every impacted store.

01:46Corporate employees will soon transition to a four-day office schedule.

01:50Additionally, CEO, Nickel, has restructured the executive team,

01:55adding Kathy Smith, Tressie Lieberman, and Mike Grams,

01:58all with prior experience at Chipotle and Yum! Brands.

02:02For now, the company believes today's painful cuts will help regain momentum

02:05after a year of declining sales.

02:08Both employees and customers are preparing for noticeable changes to this neighborhood staple.

02:13Marcelo

02:14www.bip.com