Discover the Severance Package Starbucks Offers to Employees of Closing Stores
Starbucks Announces Layoffs with Severance Packages Amid Store Closures
Starbucks to Close Over 100 Locations Across North America
In a significant move, Starbucks revealed plans to shut down around 1% of its North American outlets, translating to more than 100 store closures. This decision includes the closure of its renowned Capitol Hill Roastery in Seattle. Alongside the store closures, the company announced layoffs impacting 900 non-retail employees, intensifying the workforce reduction.
Details of Starbucks Severance Package for Laid-off Employees
El-Balad obtained a Starbucks document titled “Severance Summary,” outlining severance details for laid-off baristas and supervisors. Baristas will receive 60 hours of pay, while shift supervisors are entitled to 84 hours. Pay rates for baristas range from $15 to $22 hourly, and shift managers earn between $20 and $29, depending on the store location.
Café attendants, tasked with maintaining café cleanliness and organization, will receive 30 hours of severance pay. Retail staff affected by layoffs can also avail a lump sum equivalent to three months of their health insurance premiums, adhering to the Department of Labor’s COBRA Act. Employees will retain healthcare coverage for three months following their employment termination at the end of October.
Employee Separation and Vacation Pay Details
A separate document titled “Partner Separation FAQ — U.S. Retail Stores” indicates that employees in nine states will receive payments for their accrued vacation hours. However, hours that were granted but unused will not be compensated.
Employees have a 45-day window to decide on signing a release agreement to receive their severance benefits. Starbucks CEO Brian Niccol addressed the situation, emphasizing efforts to transfer employees to nearby locations and highlighting the importance of caring for affected partners through comprehensive severance packages.
Implications of Starbucks’ Turnaround Plan
The store closures are aligned with CEO Brian Niccol’s “Back to Starbucks” strategy, aimed at revitalizing the brand after several quarters of declining sales. The company anticipates incurring around $1 billion in costs from the store closures, with approximately $150 million allocated for employee separation benefits. According to an SEC filing, the decision was based on evaluating the financial performance and customer experience of its stores.
Starbucks’ stock has witnessed more than a 14% decline over the past year, underscoring the challenges the coffee giant faces as it initiates significant restructuring efforts.
