Considered one of the world's most popular coffee chains, Starbucks is implementing large-scale layoffs amid financial difficulties. According to the company's official statement, 900 employees are currently being laid off in the US, and nearly 400 stores across North America will be closed by the end of the month. It was also reported that some branches in the European region may close their doors.
Starbucks management stated that through these decisions, the company aims to reduce costs and increase sales in profitable areas. At the same time, the new procedure will create a number of conveniences for customers, and it is expected that the waiting time during the coffee purchase process will be significantly reduced.
For reference, Starbucks also announced in February of this year that it would reduce 1,100 jobs in the US and optimize menu composition. As a result, the company is forced to give up more than 2,000 jobs within the country within a year.
According to Starbucks CEO Brian Niccol, the new cuts will affect some coffee shops not only in America but also in Britain, Switzerland, and Austria. However, despite this, the company has not abandoned plans to open 80 new branches in Britain, as well as a total of 150 in Europe, the Middle East, and Africa.
The company's quarterly July report shows that sales volumes in several Starbucks branches, which have been operating in the US for over a year, have declined for the sixth consecutive quarter. Notably, the US is the largest and main market for Starbucks.
Following the decline in sales, Starbucks shares have fallen by 8% since the beginning of the year. Financial market analysts explain this situation by several factors. In particular, according to TD Cowen experts, the popular "drive-through" format in the USA - coffee shops that allow you to buy coffee without getting out of the car - is becoming a serious competitor for Starbucks.
Furthermore, customer surveys also yielded negative results for the company: more than 70% of customers indicated they had reduced their visits to Starbucks cafes due to high prices.
In addition, Starbucks baristas in a number of cities have begun to openly express their dissatisfaction through trade unions. This manifests itself as an additional problem for management.
It should be noted that the situation in the US labor market is also complicated. According to official statistics published at the beginning of this month, unemployment and job cuts have turned out to be much worse than expected. Many analysts link these processes to President Donald Trump's trade policy.
The problems facing Starbucks are very serious. However, the company is simultaneously trying to ensure financial stability through cuts and maintain its brand's reputation through new stores.
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