The move will result in the elimination of 900 jobs across the company.
Starbucks is cutting jobs and shuttering stores as part of CEO Brian Niccol’s billion-dollar plan to revive the coffee chain.
Starbucks announced the move on Thursday, stating in a U.S. Securities and Exchange Commission (SEC) filing that the company was restructuring its operations.
Niccol wrote in a Thursday letter to North America staff, also submitted to the SEC, that Starbucks would close about 1% of coffeehouses in fiscal year 2025, which ends on the last Sunday of September. The company will end the fiscal year with about 18,300 total Starbucks locations in the U.S. and Canada.
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Meanwhile, the coffee chain also plans to cut its non-retail workforce by 900 roles and close many open positions. Affected employees will be notified on Friday morning and given “generous severance and support packages including benefits extensions,” Niccol wrote. He asked all employees who weren’t required to work onsite or in the office to work from home on Thursday and Friday.
This is Starbucks’ second round of layoffs under Niccol. Under his leadership, Starbucks laid off 1,100 corporate employees in February. According to CNBC, Starbucks employed about 16,000 corporate staff as of the end of 2024.
Starbucks CEO Brian Niccol. Photo by Michael Reaves/Getty Images
When it comes to store closures, Starbucks is selecting which locations to shutter based on their atmosphere and financial performance. Niccol mentioned in the letter that coffeehouses that were “unable to create the physical environment our customers and partners expect” or that weren’t performing well financially would be closed.
“Our goal is for every coffeehouse to deliver a warm and welcoming space with a great atmosphere and a seat for every occasion,” Niccol wrote in the letter.
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Despite the predicted closures, Starbucks still plans to remodel more than 1,000 locations with features to inspire customers to stay, like more comfortable seating and more power outlets, per CNN Business.
According to the SEC filing, Starbucks will incur approximately $1 billion in expenses related to store closures and restructuring activities, with 90% of the costs expected to occur within its North American business. The company expects to spend about $150 million in employee separation costs, as well as $850 million in store closures.
Starbucks’ restructuring plan is caused by a sales slump. In July, the company reported its sixth consecutive quarter of declining same-store sales. Niccol’s “Back to Starbucks” plan intends to bring customers back to stores with new offerings, like protein cold foam with 15 grams of protein and no added sugar, and better service.
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Starbucks is cutting jobs and shuttering stores as part of CEO Brian Niccol’s billion-dollar plan to revive the coffee chain.
Starbucks announced the move on Thursday, stating in a U.S. Securities and Exchange Commission (SEC) filing that the company was restructuring its operations.
Niccol wrote in a Thursday letter to North America staff, also submitted to the SEC, that Starbucks would close about 1% of coffeehouses in fiscal year 2025, which ends on the last Sunday of September. The company will end the fiscal year with about 18,300 total Starbucks locations in the U.S. and Canada.
