Starbucks is closing close to 1% of its stores across the United States, eliminating retail staff as well as more than 900 non-retail workers (1).
Using the company’s annual reports, the business reporting site Sherwood News estimated that as of last year, Starbucks had an average of just under 20 employees per store (2). Starbucks did not disclose how many retail employees are being laid off due to store closures. However, according to CBC reporting, the company plans to finish this year with 124 fewer stores than last year in the U.S. and Canada (3). That would mean something in the neighbourhood of 2,500 retail employees are being shown the door, although the company has promised to try to find work for many of them at nearby locations that aren’t closing (1).
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In a small silver lining, the laid-off workers will have a bit of a cushion until they can find work again, in the form of severance pay.
According to Business Insider, an internal Starbucks document called Severance Summary revealed that laid-off baristas will get 60 hours of pay, shift supervisors will get 84 hours, and cleaning attendants around 30 hours (4). Store managers and regional managers were offered significantly more generous packages with weeks of pay, with more pay for more years of service (5). Retail employees are also going to receive a lump sum payment big enough, the company claims, to cover the cost of three months of health insurance premiums.
Since Starbucks baristas earn around $15 to $22 hourly and shift managers earn around $20 to $29 hourly, this severance pay could add up to between several hundred dollars to more than $2,000 per worker.
One employment lawyer who spoke to Business Insider, Walker Harman, said that this offer was a “positive thing” because it goes beyond any legal requirements and sends the message that the company is trying to do the right thing (4).
Still, workers will need to use this money wisely to try to help them cope with the consequences of being left unemployed.
Since packages are being offered en masse to everyone, according to their specific positions, Starbucks workers may have few or no opportunities to negotiate individual packages for themselves.
