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Why is Starbucks closing 16 stores in major US cities?

The coffee chain giant has cited security reasons for the closures of 16 key stores, but skeptics believe a unionization drive may be the real reason.

Update:
Starbucks Seattle Workers Strike Unionized Store Closures
BloombergGetty

Starbucks has announced the closure of 16 of its stores in several key locations across the United States, including six in the Los Angeles area, with the outlets to shut their doors for a final time at the end of July. The coffee chain giant decided to take this extraordinary measure after a spike in security issues affecting staff. According to an internal memo written by Starbucks senior vice-presidents Debbie Stroud and Denise Nelson, to which CNBC has had access, the stores will be closed because the company is unable to guarantee the safety of its employees in the locations in question due to an increase in violence, drug use and other societal problems.

“We know these challenges can, at times, play out within our stores too. We read every incident report you file - it’s a lot,” Stroud and Nelson wrote. “Simply put, we cannot serve as partners if we don’t first feel safe at work.” The letter cited employees witnessing firsthand “the challenges facing our communities - personal safety, racism, lack of access to healthcare, a growing mental health crisis, rising drug use, and more.”

“High volume of challenging incidents”

A Starbucks spokesman also told CNBC that the decision to close some stores had been taken following a “particularly high volume of challenging incidents that make it unsafe for us to operate.

The letter issued by Stroud and Nelson also said employees would be offered active shooter training and that the company may overturn a 2018 policy by closing restrooms to the public. Those employees at the stores affected will be offered jobs at stores nearby, the company added.

The decision to close stores in high-risk areas comes at a time of significant upheaval for the chain, which is currently facing a wave of unionization efforts across the United States. According to CNN, 133 of the company’s 9,000-odd stores have voted to unionize with more expected to follow suit. Incoming CEO Howard Schulz issued another letter in which he promised to “reinvent Starbucks for the future” and “radically” improve conditions for the company’s employees.

Where are the Starbucks stores due to close in the US?

According to financial news outlet Insider, the stores that are set to be shut down are the flowing:

  • Santa Monica & Westmount, West Hollywood
  • Hollywood & Western, Los Angeles
  • 1st & Los Angeles (Doubletree), Los Angeles
  • Hollywood & Vine, Hollywood
  • Ocean Front Walk & Moss, Santa Monica
  • 2nd & San Pedro, Los Angeles
  • 10th & Chestnut, Philadelphia, Pennsylvania
  • 4th & Morrison, Portland, Oregon
  • Gateway, Portland, Oregon
  • 23rd & Jackson, Seattle, Washington
  • Roosevelt Square, Seattle, Washington
  • E. Olive Way, Seattle, Washington
  • 505 Union Stn, Seattle, Washington
  • Westlake Center, Seattle, Washington
  • Hwy 99 & Airport Rd, Everett, Washington
  • Union Station Train Concourse, Washington, DC