Starbucks Unveils Severance Packages for Staff Impacted by Recent Layoffs and Store Closures
Starbucks Unveils Severance Packages for Staff Impacted by Recent Layoffs and Store Closures
Starbucks has begun detailing the severance packages for thousands of employees affected by its recent wave of layoffs and North American store closures. The move comes less than a week after the coffee giant announced plans to shutter over 100 locations, representing approximately 1% of its North American footprint, and eliminate 900 non-retail positions.
According to documents viewed by Business Insider, laid-off baristas are entitled to 60 hours of pay, while shift supervisors will receive 84 hours. Entry-level café attendants are slated to receive 30 hours of pay. These figures are significant given that states typically do not mandate severance for hourly workers.
Beyond monetary compensation, affected retail staff will also receive a lump sum payment covering three months of health insurance premiums, aligning with the Department of Labor’s COBRA Act. Employees have been given 45 days to decide on signing a release agreement to receive their severance benefits. Additionally, staff in nine states will be compensated for accrued vacation hours.
The extensive restructuring is part of CEO Brian Niccol’s “Back to Starbucks” turnaround strategy, aimed at revitalizing the chain amidst declining sales. An SEC filing on September 23 indicated that Starbucks anticipates a $1 billion cost from these store closures, with approximately $150 million allocated specifically for employee separation benefits.
Starbucks CEO Brian Niccol previously stated, “We’re working hard to offer transfers to nearby locations where possible… For those we can’t immediately place, we’re focused on partner care including comprehensive severance packages.”
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