Starbucks Announces $1 Billion Restructuring, Hundreds of Layoffs, and North American Store Closures

Starbucks Announces Restructuring Plan: Store Closures and Layoffs

Starbucks is implementing a significant restructuring plan involving store closures and layoffs of approximately 900 non-retail employees in the U.S. and Canada. This initiative is part of a larger effort led by CEO Brian Niccol to revive sales and enhance the customer experience, costing the coffee giant an estimated $1 billion.

Details of the Restructuring

According to company statements, the restructuring includes closing approximately 1% of its North American stores. This could translate to over 400 store closures across the U.S. and Canada. Starbucks expects to end its fiscal year with roughly 18,300 locations open in North America, a decrease from the 18,734 it had in June. About $850 million of the $1 billion restructuring costs will be tied to store closures, with $150 million covering employee separation costs.

• Store Closures: Affecting approximately 1% of North American locations.
• Layoffs: Approximately 900 non-retail positions being eliminated.
• Financial Impact: $1 billion restructuring plan.

CEO Brian Niccol's Vision

CEO Brian Niccol, who took over in 2024, emphasized the changes in a letter to employees. He stated that the company reviewed locations that were unable to provide the expected customer and employee experience or where financial performance was lacking. Niccol aims to refocus resources on improving customer experience and operational efficiency. This includes initiatives like the "$500 million Green Apron Service investment" to enhance labor hours in company-owned cafes.

“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.” - Brian Niccol, CEO of Starbucks

Impact on Employees and Locations

Baristas affected by the Starbucks store closures will be offered transfers to nearby locations or severance packages. Starbucks Workers United has indicated that it will engage in effects bargaining for impacted union locations. Some Starbucks stores will undergo renovations to give off a warmer look and feel.

Specifically, three "Pick Up" locations in Ohio are confirmed to be closing: two at Ohio State University and one at Miami University Bell Tower. These locations were "exclusively designed for mobile orders and quick pick up without the wait." Starbucks will notify affected employees by Friday, September 26.

Broader Strategic Context

The restructuring is part of a broader plan to invest in customers, boost operational efficiency, and reverse a six-quarter slump in same-store sales. Niccol has also prioritized initiatives like a return to a four-day in-office schedule for certain employees and updates to the executive team. The announcement follows a previous reduction of 1,100 corporate workers in February 2025.

The future strategy of Starbucks includes remodeling over 1,000 locations to create a more inviting atmosphere, signaling a move towards community-focused coffeehouses. While the company's stock has seen a slight decline, Niccol's turnaround efforts aim to revitalize the brand and improve long-term growth.