Starbucks has announced an aggressive restructuring plan that includes the closure of approximately 400 company-operated stores and layoffs of roughly 900 non-retail (corporate and support center) employees.
CEO Brian Niccol confirmed the move, stating the closures target locations that no longer align with the brand’s performance standards or customer experience expectations. He added that impacted employees will be notified imminently, and efforts will be made to reassign as many as possible to nearby stores. Those unable to be relocated are expected to receive severance support.
Starbucks estimates the restructuring will carry a cost of around US$1 billion, including severance, lease exits, and asset write-downs. The company expects to wind down its fiscal year with about 18,300 North American locations, down from 18,734 at the end of Q3.
The announcements come as Starbucks grapples with slipping sales and tightening margins. The company has faced six consecutive quarters of same-store sales declines in the U.S., putting pressure on its business model amid inflation, evolving consumer behavior, and rising operating costs.
Niccol has previously laid off over 1,100 corporate roles earlier this year as part of a broader cost-containment and transformation effort.
Starbucks Workers United expressed concern that decisions had been made without barista input. The union said it will seek effects bargaining at stores affected by closures, to ensure impacted workers have placement options. The company has denied union status played any role in its decisions.
From a strategic standpoint, Starbucks is doubling down on its “Back to Starbucks” philosophy of strengthening customer experience, store design, and operational focus. The brand plans to renovate over 1,000 stores as part of that effort.
