Starbucks announced on September 25, 2025, that it will close hundreds of underperforming stores across North America and lay off approximately 900 non-retail employees as part of a comprehensive $1 billion restructuring effort aimed at revitalizing its business.
Store Closures and Restructuring
The company plans to reduce its North American store count to fewer than 18,300 locations by the end of the fiscal year, down from 18,734 as of June 29, 2025. The closures are expected to amount to about 1% of Starbucks’ North American outlets. CEO Brian Niccol explained that the closures target stores that fail to meet performance or experience standards. Affected employees will be notified soon, with efforts made to reassign them to neighboring locations. Additionally, around 900 non-retail jobs will be cut, with employees being asked to work remotely for two days. The restructuring includes severance packages and other associated costs, totaling roughly $1 billion. These changes are part of Niccol’s ongoing turnaround effort focused on enhancing in-store experiences and profitability. Despite some early success in customer satisfaction, the company continues to struggle with sales and profit margins. Investors reacted mildly to the news, with Starbucks shares down 0.5% on Thursday and 7.7% down for the year.
Union Response
The decision has drawn criticism from Starbucks Workers United, which represents many of the company’s employees. The union argues that the layoffs and store closures were implemented without adequate consultation with workers and have called for more employee-focused reforms. Starbucks maintains that union status was not a factor in selecting store closures.
Future Outlook
Despite the immediate closures and job cuts, Starbucks plans to reinvest in over 1,000 redesigned store locations to enhance customer experience. The company aims to strengthen its brand and improve resilience in the face of ongoing challenges. CEO Niccol emphasized the importance of these efforts in adapting to evolving market demands and restoring the company’s growth trajectory.
The restructuring plan reflects Starbucks’ commitment to adapting to changing market conditions and improving its operational efficiency. While the immediate impact includes store closures and job cuts, the company’s long-term strategy focuses on enhancing customer experience and profitability.