SEATTLE — Starbucks is laying off about 900 employees and closing underperforming stores across Canada and the U.S. as part of a sweeping turnaround effort, the company announced Thursday.
In a letter to staff, CEO Brian Niccol acknowledged the closures would be “a more significant action” than usual and said employees whose positions are being eliminated will be notified early Friday. A Starbucks Canada spokesperson confirmed Canadian locations will be affected but declined to specify how many stores or workers are involved.
The decision follows a review showing many stores were missing financial performance targets or failing to deliver the customer experience the brand promises. “Our coffeehouses are centres of the community and closing any location is difficult,” Niccol wrote.
Starbucks expects to finish its fiscal year with 18,300 stores in North America — a rare contraction of its footprint, down 124 from last year.
Niccol, who was hired a year ago to revive the brand after successfully turning around Chipotle, said Starbucks must sharpen its focus and streamline operations to regain momentum. The company has recently eliminated extra charges for non-dairy milk and promised additional changes aimed at stabilizing sales.
Employees impacted by the layoffs will receive severance and support packages.
For Starbucks, the retrenchment underscores the challenge of sustaining growth while balancing costs in a changing retail environment — and marks one of the most dramatic restructurings in the company’s history.