If you are a big coffee fan, you may find yourself distraught to learn that Starbucks recently announced they’re shutting down over 400 of their U.S. locations including 2 Cincinnati Ohio locations. The decision to shut down these stores is supposedly part of a plan to better the company and eventually reopen stores.
On Sep. 25 a memo appeared on the Starbucks official website where Brian Niccol, the companies CEO wrote, “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.” He continued to explain that the stores that performed the most poorly will be the first to shut down and at the end of the fiscal year, the number of locations will drop from 18,734 to 18,300. Additionally, Niccol claimed, “Over the next 12 months, we also plan to uplift more than 1,000 locations to introduce greater texture, warmth, and layered design.” As part of the plan to “better” Starbucks, it appears they will be using the saved money from the underperforming stores to remodel already existing, well-performing stores.
Now, you may be wondering what this means for the employees of the stores shutting down, and unfortunately, it isn’t good. Niccol writes, “Second, we’re further reducing non-retail headcount and expenses. This includes the difficult decision to eliminate approximately 900 current non-retail partner roles and close many open positions.” This means that 900 Starbucks employees will lose their jobs as part of Niccol’s plan to better the company. Niccol goes on to write that the severance and support packages for those left unemployed is “generous,” however, specific dollar amounts are unmentioned.
As for the specific locations being shut down, Niccol has yet to release which locations are being shut down and has only specified that they are the underperforming stores. Fortunately, USA TODAY compiled a list of stores based on previous store closures which includes Cincinnati Ohio locations on Vine Street and Columbia Parkway.
Only time will tell how much the remaining Starbucks stores will actually improve from Niccol’s plan. In addition, it’ll be interesting to see how the profit of the company fluctuates after losing not only so many stores, but also so many employees. Hopefully we see a rise in quality by the next fiscal year.