Coffee giant Starbucks said on Thursday it would close underperforming outlets in North America and cut 900 jobs in a $1 billion restructure, as chief executive Brian Niccol presses ahead with his plan to revive the company's fortunes.
In his first year on the job, Mr Niccol has focused on investing in Starbucks shops to reduce service times and restore a coffee house environment, while also trimming management layers.
The company has posted six straight quarters of sales decline in the US as demand for its lattes took a hit from consumers turning choosy and an increase in competition.
"During the review, we identified coffeehouses where we're unable to create the physical environment our customers and partners expect, or where we don't see a path to financial performance, and these locations will be closed," Mr Niccol said in a letter to employees.
The company expects most closures to be completed by the end of the fiscal year, taking its company-operated store count in North America down by about 1 per cent.
The chief executive said the company would end the fiscal year with nearly 18,300 Starbucks outlets in the US and Canada. This compares to the 18,734 disclosed in a regulatory filing in July.
Mr Niccol has enjoyed the confidence of investors since taking over after his leadership at Chipotle Mexican Grill where he was credited with leading a turnaround at the burrito chain.
Starbucks said on Thursday its support teams would be affected by the job cuts and that the company would be closing many positions.
The firm employed about 10,000 people in non-coffee house roles in the US as of September 29, 2024.
"This is a more significant action that we understand will impact partners and customers," Mr Niccol said on Thursday.
At the same time, Starbucks is investing to improve staffing and incorporate technology to sequence orders more efficiently at its coffee shops to enhance customer experience.
The company said earlier this year it would eliminate 1,100 corporate roles. In August, it also announced a modest 2 per cent increase to all salaried employees in North America.
