Starbucks is taking major action to restructure its business plan, choosing to close hundreds of cafés and introducing a second round of layoffs at its headquarters.
CEO Brian Niccol highlighted the on Thursday, writing, “While we’re making good progress, there is much more to do to build a better, stronger, and more resilient Starbucks.”
“As we approach the beginning of our new fiscal year, I’m sharing two decisions we’ve made in support of our Back to Starbucks plan. Both are grounded in putting our resources closest to the customer so we can create great coffeehouses, offer world-class customer service, and grow the business,” Niccol wrote.
The coffee chain will close around 1% of its locations in September. The company reported having 18,734 locations in North America in June, but at the end of the month, it will have 18,300 stores.
The company expects the restructuring efforts in Niccol’s continued “Back to Starbucks” plan will cost $1 billion.
Niccol explained that Starbucks conducted a review of its coffeehouse portfolio to determine which locations would close.
“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,” Niccol wrote.
Niccole said while closures are common for financial performance and lease expiration, the company’s announcement marks a “more significant action that we understand will impact partners and customers.”
However, Niccol said in fiscal year 2026, Starbucks will grow the number of coffeehouses operated once again. He also shared plans over the next year to renovate more than 1,000 locations.
Starbucks also announced another 900 corporate layoffs, on top of around 1,000 layoffs announced in February. Employees impacted will be notified on Friday and receive “generous severance and support packages.”
Niccol said many “open” positions on the job board will be closed.
“I know these decisions impact our partners and their families, and we did not make them lightly. I believe these steps are necessary to build a better, stronger, and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers, and the communities we serve,” Niccol said.
The announcement comes as over political activist Charlie Kirk’s assassination and customers requesting to write Kirk’s name on cups containing his favorite order.
In Ohio, a “racist’s fav drink” on a cup for a customer ordering mint majesty with two honeys, the favorite drink of murdered conservative activist Charlie Kirk.