Starbucks fans are going to have to do a quick location check to make sure their favorite store is still around.
The Seattle-based coffee giant said this week it will close hundreds of locations in the U.S. and Canada while also laying off some 900 employees.
Company officials said the closures would begin immediately, though they wouldn’t say how many stores they’re closing. They did say the chain expected to have some 18,300 North American locations at the end of the fiscal year Sunday. The Associated Press reported the chain had 18,734 locations as of June 29.
In a research note Thursday, TD Cowen analyst Andrew Charles estimated Starbucks will close around 500 stores in its fiscal fourth quarter, according to the AP report.
Starbucks said workers in its stores will be offered transfers to other locations where possible and severance packages. Starbucks said it will notify non-retail employees whose positions are being eliminated early Friday. Starbucks asked employees who can work from home to do so on Thursday and Friday.
In a letter sent to employees Thursday, Starbucks Chairman and CEO Brian Niccol said a review of the company’s stores identified locations where the company doesn’t see a path to financial stability or isn’t able to create the physical environment customers expect. Those stores are being closed.
“Each year, we open and close coffeehouses for a variety of reasons, from financial performance to lease expirations,” Niccol wrote. “This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centers of the community, and closing any location is difficult.”
According to the AP report, this is the second big round of layoffs at Starbucks this year. In February, Niccol announced the layoffs of 1,100 corporate employees globally and eliminated several hundred open positions. At the time, Niccol said Starbucks needed to operate more efficiently and increase accountability for decisions.
