Starbucks to close some stores, cut more jobs in $1B restructuring plan
Starbucks Corp. continues to revamp its U.S. operations as part of its “Back to Starbucks” turnaround strategy under CEO Brian Niccol, who took the reins one year ago.
The coffee giant has approved a restructuring plan, expected to cost about $1 billion, that includes closing underperforming locations and cutting more non-retail jobs. The company said in an SEC filing that 90% of the restructuring cost will be attributable to its North America business. (Among the closed stores was Starbucks' flagship unionized location in Seattle, which also has an in-house roastery, reported Reuters.)
“I know these decisions impact our partners and their families, and we did not make them lightly," Niccol said in a letter to employees. “I believe these steps are necessary to build a better, stronger and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers, and the communities we serve."
In his letter, Niccol said that Starbucks’ overall company-operated store count in North America will decline by about 1% in fiscal year 2025 after accounting for both openings and closures. At the end of June, Starbucks had 18,734 North American locations. The company will close out its current fiscal year (ends Sept. 29) with nearly 18,300 stores across the U.S. and Canada.
Niccol said the locations marked for closure were those where the company was “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”
Employees in the stores scheduled to close will be offered transfers to nearby locations where possible. The company said it will provide comprehensive severance packages for those it can’t immediately place.
While it is ending its fiscal year with store shutterings, Starbucks said it is committed to growth and plans to grow the number of coffeehouses it operates in fiscal 2026.
The company also has launched an extensive store "refresh" initiative that involves upgrading more than 1,000 existing locations during the next 12 months with more comfortable furnishings and other enhancements. The investment is tagged at approximately $150,000 per store.
[READ MORE: Starbucks to give makeovers to 1,000 cafes by end of 2026]
Non-Retail Layoffs
As part of the restructuring plan, Starbucks also is reducing more non-retail jobs and expenses. (In February, the chain said some 1,000 layoffs.) It will eliminate approximately 900 current non-retail partner roles and close many open positions. The company said will offer generous severance and support packages, including benefits extensions, to the affected employees.
