Starbucks in North America has laid off nearly 1,000 employees and closed some stores

On September 25th local time, the US coffee chain Starbucks announced that it would lay off 900 employees and close approximately 100 underperforming stores, including its iconic Seattle Roastery stores. This is the second round of large-scale layoffs by Starbucks in the past year. The company also cancelled many vacant positions to further cut costs and concentrate resources on store operations. Starbucks stated that after evaluation, some stores could not achieve financial stability or provide the expected physical environment for customers, and thus would be closed. The affected positions were mainly concentrated in the North American region. The company will notify employees this Friday and require enterprise employees to work from home on Thursday and Friday. This adjustment is expected to involve approximately 1 billion US dollars in severance pay, lease termination, and store closure-related expenses. At the same time, some stores in the UK, Switzerland, and Austria will also be closed.

For this coffee giant with over 32,000 stores worldwide, Starbucks' move has had multi-dimensional and far-reaching impacts in the business field. Firstly, it has an impact on the industry. As a global coffee chain benchmark, the number of Starbucks stores in North America has decreased for the first time, and the expected 1% reduction indicates that the industry is shifting from "expanding rapidly" to "refining and concentrating". The 900 layoffs by Starbucks are concentrated in the headquarters and support teams, reflecting the company's focus on reallocating resources to frontline stores and digital innovation, and restructuring the cost structure. This move may prompt other brand leaders to re-evaluate their expansion strategies and focus on single-store efficiency rather than the number of stores. The 1 billion US dollars in restructuring costs include 850 million for store closures and lease contract termination, and 150 million for employee severance. This indicates that the industry is addressing profit pressure by eliminating inefficient assets, optimizing cost structures, and promoting the upgrading of cost control across the board. Starbucks' closure of stores that cannot provide a "coffee house atmosphere" and upgrading of over 1,000 core stores suggest that the industry will further differentiate: the high-end line strengthens scene experience, the cost-effective line seizes the market through supply chain advantages, and mid-range brands face pressure.

Secondly, it has an impact on consumers. Starbucks plans to upgrade its stores (improve the experience, but consumers' tolerance for a $5 cup of coffee has continued to decline, the price band stratification has intensified, and the brand needs to find a balance between experience and price. Consumers are turning to convenience store coffee, ready-to-drink coffee, or specialty coffee shops, and Starbucks' store closures may accelerate this trend, especially in an economic environment weakening context. The price-performance demand may further dominate the market. The 1 billion US dollars in restructuring costs include 850 million for store closures and lease contract termination, and 150 million for employee severance. This indicates that the industry is addressing profit pressure by eliminating inefficient assets, optimizing cost structures, and promoting the upgrading of operational efficiency and store experience. Starbucks' closure of stores that cannot provide a "coffee house atmosphere" and upgrading of over 1,000 core stores suggest that the industry will further differentiate: the high-end line strengthens scene experience, the cost-effective line seizes the market through supply chain advantages, and mid-range brands face pressure.

Thirdly, it has an impact on the competition in the commercial market. The North American market is facing the rise of local brands such as Dunkin' and Blue Bottle Coffee. Starbucks' store closures may provide market gaps for competitors, accelerating the competition for market share. Chinese coffee brands such as Ruijin and Cudi are accelerating their global expansion with low-price strategies to reshape the perception of cost-effectiveness, coupled with the expansion of international players such as Tims. Starbucks' "third space" premium ability is facing severe challenges. The UK, Austria, and Switzerland, etc. will also close some stores, although the specific number is not disclosed, it reflects Starbucks' global strategic contraction, which may provide expansion opportunities for local specialty coffee shops or chain brands.

In summary, Starbucks' strategic adjustment of laying off employees and closing some stores in North America has not only triggered a transformation in the logic of industry scale expansion and cost structure reconfiguration, promoting the intensification of market stratification competition, but also prompted the company to focus on operational efficiency and store experience upgrades. At the same time, the rise of local and international brands, the increasing demand from consumers for cost-effectiveness, combined with the capital market's contest between short-term pain and long-term potential, have jointly painted a complex picture of the coffee industry during the transformation period. These series of actions may reshape the competitive ecosystem of the North American coffee market and also provide an important observation sample for corporate transformation in the global business environment.