Starbucks is closing stores and cutting 900 non-retail jobs as part of CEO Brian Niccol’s plan to revive the coffeehouse chain.
The move aligns with the “Back to Starbucks” turnaround plan, centred on reducing operational complexity and elevating the in-store experience for customers.
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The downsizing has been prompted by a review of the chain’s store portfolio.
Niccol stated in a letter to employees: “During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed.”
Impacted staff will receive what Niccol described as generous severance and support packages including benefits extensions. Unfilled positions will be eliminated.
The company anticipates completing most closures by the end of the 2025/26 fiscal year.
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By GlobalDataStarbucks projects $1bn in costs for closures, organisational restructuring and related activities.
90% of these costs will affect the North American business. Most expenses will be recorded in fiscal 2025.
Restructuring costs include $150m for severance, $400m for store asset disposal and impairment, and $450m for lease-related expenses.
Of these, $400m are non-cash charges for asset impairment. The remaining $600m covers future cash costs for severance and lease exits.
In 2025, the number of company-operated stores in North America will reduce by 1%, factoring in both closures and openings.
Starbucks expects to operate 18,300 sites across the US and Canada by fthe iscal year-end, including both company-operated and licensed cafés. Store expansion is planned to resume in fiscal 2026.
By September 2026, more than 1,000 stores will be refurbished to feature “greater texture, warmth, and layered design.”
In July 2025, CNN Business reported that Starbucks will phase out its pickup-only store format, introduced in 2019, as it no longer aligns with company strategy.
The brand is also developing a small-format version of stores with 10 seats in New York City.
For the third quarter of fiscal 2025, Starbucks registered attributable net earnings of $558.3m, down 47% from the same period a year ago. Global comparable store sales dropped by 2% year-on-year.
