Starbucks said on Thursday that it will eliminate 900 non-retail jobs and “close many open positions.”
The coffee retailer will also shutter some of its underperforming stores, CEO Brian Niccol told employees in a memo.
Even with the closures, Starbucks will end the year with more than 18,000 locations, he added. Thursday’s announcements will cost the company about $1 billion, it disclosed in a securities filing.
“The ‘Back to Starbucks’ strategy focuses on revitalizing coffeehouses and enhancing the customer experience,” the company wrote. “As part of this strategy, the Company assessed its existing store portfolio with respect to both whether coffeehouses had a viable path to offering the physical environment consistent with the brand and a clear path to financial performance. It will close those coffeehouses that do not meet these criteria.”
The restructuring is the latest major change from Niccol, who was appointed to run the company just over a year ago. Earlier this year, Starbucks cut another 1,100 corporate jobs.
“While we’re making good progress, there is much more to do to build a better, stronger and more resilient Starbucks,” Niccol wrote in the memo.
So far, Niccol’s strategy has received mixed reviews. The company’s stock is down more than 7% so far this year.
Starbucks revamped in-store condiment offerings, instructed store workers to write personal messages on cups again and aims to have drinks prepared in under four minutes.
It rebranded stores as “coffeehouses” and also pulled some complicated-to-make items off its menu to streamline operations.
The company’s sales have also faced challenges. Same-store sales have fallen for six straight quarters, hurt by price-sensitive consumers.
After Starbucks rolled out a dress code, thousands of baristas went on strike. The strike expanded when workers demanded pay increases.