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Starbucks could announce heavy layoffs

Starbucks (NASDAQ: SBUX) is about to make “significant changes” to its organizational structure that could include corporate layoffs, according to an internal memo sent to employees by CEO Kevin Johnson.

“We must increase the velocity of innovation that is relevant to our customers, inspires our partners, and is meaningful to our business,” Johnson said in a memo.

“To accomplish this, we are going to make some significant changes to how we work as leaders in all areas of the company.”

Johnson said that the executive leadership team is working with supervisors to find ways of innovating faster in a new retail environment.

While some roles will be consolidated, others will be shifted, and there will be some non-retail layoffs.

The changes to the company are set to begin this week and continue into November. News of the layoffs was first reported by Bloomberg.

Starbucks has been struggling with weak sales in the U.S. for several quarters. Its hope was that offering more cold beverages and new lunch items would draw people into its cafes.

However, the coffee giant has also had to scale back its store growth and close a number of underperforming company-owned cafes in densely populated areas. Starbucks usually closes about 50 stores annually, but expects to close about 150 next year.

The company also plans to reduce the number of new licensed stores in 2019 by about 100 stores.

Shares in the retail coffee giant moved up 32 cents to $57.01 early Tuesday, within a 52-week trading range of $47.37 to $61.94.

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