Starbucks is cutting approximately 900 jobs and closing underperforming stores in the U.S. and Canada, CEO and chairman Brian Niccol said Thursday.
The “difficult” decisions are part of a company overhaul designed to grow the business and build a “better, stronger, and more resilient Starbucks,” Niccol said in an open letter to employees and stakeholders.
The announcement follows a review of the company’s North American portfolio, which identified coffeehouses that can’t deliver the “physical environment” expected by customers and “where we don’t see a path to financial performance,” Niccol said.
Without providing specifics on how many stores will shut down, Niccol said the total number of company-operated locations in North America should decline by about 1% in fiscal year 2025.
The current fiscal year will end with nearly 18,300 locations across the U.S. and Canada — up from 8,424 stores at the end of fiscal year 2024. That number is expected to grow next year, “as we continue to invest in our business,” Niccol said.
The store is also closing many open positions and eliminating approximately 900 “non-retail” roles.
Employees being laid off will be notified Friday, Niccol said, adding the company will offer “generous severance and support packages,” which will include extensions of current benefits.
All employees who are not required to be on-site or in the office are asked to work remotely Thursday and Friday.
The overhaul is part of Starbucks’ “Back to Starbucks” plan, launched by Niccol at the start of his tenure as CEO in September 2024 to elevate the in-store experience, win back customers, and reestablish the company “as the community coffeehouse.”
It comes with a price tag of approximately $1 billion, including $450 million for early lease terminations and about $150 million for severance costs, according to an SEC filing.
“I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol said. “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.”