Starbucks to Close Significant Stores and Proceed With Layoffs

Starbucks has announced a major restructuring plan, under which it will close hundreds of underperforming stores in North America and lay off about 900 corporate (non-retail) employees.

As part of the move, the company expects its store count in North America to decline by roughly 1% in fiscal 2025, factoring in the closures and some new store openings earlier in the year.

Starbucks CEO Brian Niccol said the closures target coffeehouses “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”

The restructuring cost is estimated at $1 billion, covering severance, asset write-downs, lease expenses, and related charges.

In addition to the store closures, Starbucks will eliminate about 900 corporate support roles and remove many open positions.

Some key context:

Starbucks has already cut non-retail staff earlier in 2025 (about 1,100 in February) as part of internal streamlining.
The company also plans to remodel over 1,000 stores, with updated interiors, seating, and design features to revive a more classic “coffeehouse” feel.
Shares were little changed in premarket trading; Starbucks stock is down for the year amid weakening U.S. demand for premium beverages.

Main Points (Highlights)

Starbucks is closing hundreds of stores in the U.S. and Canada, targeting roughly 1% of its network.
The company is laying off approximately 900 corporate employees (non-retail).
The total expected cost of the restructuring is about $1 billion.
Store closures are concentrated in locations that fail to meet design, service, or financial thresholds.
Starbucks has plans to remodel over 1,000 remaining stores to revitalize its brand experience.
This is a continuation of cost cutting and efficiency efforts already underway earlier in 2025.

Projections (Pros & Cons)

Potential Upsides (Pro):

Stronger focus & efficiency: By shedding underperforming stores and support roles, Starbucks might better allocate resources toward high-performing locations and core services.
Improved customer experience: Store remodels and design investments may attract customers back and improve dwell time, which could boost beverage and food sales.
Cost savings & financial stability: If closures and layoffs reduce structural costs significantly, Starbucks may stabilize margins and respond better to declining demand.
Strategic reset: This move could allow Starbucks to lean into its core identity (coffee, café experience) rather than overextending into less profitable formats.

Potential Downsides (Con):

Job losses / community impact: The 900 corporate layoffs will affect many employees and their families. Communities losing Starbucks stores may suffer from reduced foot traffic or lost convenience.
Brand damage / customer backlash: Closing stores, especially community staples or high-visibility locations, can harm brand goodwill and alienate loyal customers.
Execution risk: The process of shutting stores, transferring staff, handling leases, and remodeling is complex. Missteps could disrupt operations, supply, or service.
Competitive pressure: If Starbucks retracts too much, competitors (local cafés, fast casual chains) may seize market share, especially in neighborhoods where Starbucks shuts down.
Capital burden & short-term losses: The $1 billion restructuring cost is large — if the expected benefits don’t materialize quickly, it could strain finances.

Sources / References

Reuters – Starbucks to close stores, cut jobs as CEO deepens restructuring Reuters
AP News – Starbucks to close hundreds of stores, lay off employees AP News
The Guardian – Starbucks to cut 900 jobs and close dozens of North American stores The Guardian