Starbucks is undergoing a major overhaul under CEO Brian Niccol, announcing plans to close several hundred stores and lay off about 900 corporate employees in North America as part of a $1 billion restructuring effort. The closures will reduce the company’s footprint by roughly 1%, from 18,734 stores at the end of June to an expected 18,300 by the end of September.
Niccol explained that stores being closed are those unable to provide the atmosphere customers and staff expect or those without a clear path to financial success.
“This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centres of the community, and closing any location is difficult,” he said.
The company is allocating roughly $850 million to costs related to store closures and lease exits, plus around $150 million for employee separations. Despite the cutbacks, Starbucks plans to invest in renovating over 1,000 locations with more comfortable seating, warmth in design, and better amenities to encourage customer visits.
Alongside store closures, layoffs will affect primarily corporate staff, following previous reductions earlier this year. Niccol emphasised that affected employees would receive generous severance and support.
Since taking charge about a year ago, Niccol has sought to reinvigorate Starbucks by cutting about 30% of the menu, introducing trendier items like protein toppings and coconut water, and revamping food offerings with new pastries. Other changes include bringing back self-serve milk stations and personalising cups with doodles, along with a subtle brand name shift to “Starbucks Coffee Company.”
However, some changes have sparked internal pushback, including disputes over new uniform policies and concerns about the complexity of certain new drinks during busy periods.
Starbucks aims to finish fiscal 2025 with a leaner, more focused store network and resume growth in the next fiscal year, helping the brand remain a community staple amid rising competition and changing consumer habits.