Portuguese 
English 
Spanish 
3 min of reading 
0 comments 
Coffee Shop Chain Confirms Closures, Layoffs, And Bets On Renewal Of Units To Attempt To Recover Market Confidence
The Starbucks confirmed on October 1, 2024 the closure of hundreds of stores in North America. In addition, the chain announced the layoff of approximately 900 corporate employees.
The move is part of a restructuring plan estimated at US$ 1 billion, which was created to reposition the chain after results fell below expectations.
According to an official statement, the company closed 1% of its units on the continent. Thus, the total number dropped from 18,734 in June to 18,300 in September 2024.
-
Inflation in March reaches 0.88% according to IBGE and pressures the Brazilian economy, impacting family budgets and requiring more strategic decisions to maintain financial control.
-
In Paraná, distributor Pacto connects 100% of the load in Coronel Vivida to batteries: a BES of 10 MW and 20 MWh costs just over R$ 30 million and lowers the local tariff now.
-
With a dependence of up to 80% on gas imported from the United States, Mexico is responding with a robust energy strategy, betting on shale gas, creating a scientific committee, and preparing to expand natural gas production to reduce vulnerability and strengthen its energy security in the coming years.
-
The United States proposes to Brazil a critical minerals agreement with a minimum price to combat Chinese dumping and priority for investment, but the Planalto is blocking the signing out of fear of upsetting China and due to electoral calculations in a year of competition.
The announcement came days after a preliminary signal on September 24, 2024. Therefore, the decision marks the most concrete stage of the reformulation.
Restructuring Triggers Cuts And Strategic Changes
The company explained that the closed stores were unable to provide the expected physical experience for customers. Additionally, many had no prospects for positive financial returns.
The CEO Brian Niccol, who has been in charge since 2023, highlighted in a letter to employees: “This is an action that will impact partners and customers. Our coffee shops are community centers, and closing any unit is always difficult.”
In addition to the closures, there was the layoff of 900 corporate employees in October 2024. This number adds to the 1,000 layoffs made in February of the same year.
The employees received the official communication on September 26, 2024. However, the company ensured severance packages and support. At the same time, several open positions were frozen indefinitely.
Store Renovation And Menu Adjustments
Even with the reduction of units, Starbucks announced it will renovate more than a thousand coffee shops by 2025. Thus, the company seeks to improve its physical presence.
These stores will receive more comfortable chairs, a greater number of outlets, and warmer colors. Therefore, the goal is to extend customer stay and enhance the experience inside the units.
Niccol had already promoted changes to the menu. There was a 30% reduction in offered items. In contrast, new products were included, such as revamped croissants, baked goods, and drinks with protein toppings and coconut water.
The chain also reintroduced self-service stations for milk and sugar. Additionally, it resumed the historical name “Starbucks Coffee Company”, reinforcing the brand’s origins.
Falling Stock And Internal Criticism
Despite the initiatives, the company has not yet achieved consistent results. Thus, Starbucks shares fell about 12% between October 2023 and September 2024.
Some measures also raised internal questions. Changes in uniforms led to legal actions. Furthermore, certain recently launched drinks were considered difficult to prepare during peak hours, increasing pressure on employees.
According to market analysts, Starbucks needs to balance the strategy of physical renewal and menu changes with expected financial performance. However, this balance depends on market reactions and consumer adaptations.
Key Points Of The Restructuring Plan
- Closure of about 500 stores in North America.
- Reduction from 18,734 to 18,300 units in three months.
- Estimated cost of US$ 1 billion for the restructuring.
- Layoff of 900 corporate employees in October 2024, in addition to 1,000 cuts in February.
- Investment in the renovation of more than a thousand stores.
- 30% reduction in the menu and new products launched.
- 12% drop in stocks over 12 months.
Outlook And Next Steps
The restructuring plan is expected to be completed by 2025. However, the process will require constant adjustments.
For Starbucks, the challenge will be to balance cost-cutting and store modernization. At the same time, the company needs to regain sustainable growth and restore credibility in the market.
The CEO Brian Niccol stated that the goal is to rebuild the trust of customers and investors. However, this goal will require unpopular decisions in the short term.
Experts remind that the coffee shop sector faces cost pressures and shifts in consumer behavior. Thus, the immediate effects of the reforms may be limited.
Meanwhile, investors are watching the next quarterly results. Therefore, the market expects signs of recovery in sales and renewed financial stability.
Seja o primeiro a reagir!