Starbucks Stock Rises On Planned Layoffs But Retail Mood Sours

synopsis

Shares of Starbucks ($SBUX) were in the spotlight, rising nearly 0.7% on Friday, as the coffee chain said it would undertake layoffs of an undisclosed number of employees as part of a restructuring of corporate staff, but retail sentiment inched down.

Starbucks Chairman and CEO Brian Niccol reportedly said in a letter to employees was seeking more accountability and reduce complexity and work silos, saying, “Our size and structure can slow us down, with too many layers, managers of small teams and roles focused primarily on coordinating work.”

“I do not take these decisions lightly, and I appreciate that this will create uncertainty and concern between now and then,” Niccol reportedly wrote. “I wanted to be transparent about our progress and our plans and ensure that you hear about this work directly from me.”

Sentiment on Stocktwits turned ‘bearish’ compared to ’neutral’  last week when the company also announced the rollback of its ‘open door’ policy. Message volumes also slipped to low compared to normal a week ago.

Some commenters on the Stocktwits platform were questioning the company's turnaround strategy and amid competition from other coffee chains.

Starbucks’s proposed policy is part of a “new code of conduct” under its new CEO Niccol. The policy seeks to ban panhandling, smoking, vaping, consuming outside alcohol, and discrimination, according to media reports.

Starbucks is seeing growing competition from cheaper alternatives from local brands in markets where it operates.

Starbucks stock is up 4.25% year-to-date.

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