Starbucks plans to close stores and lay off employees in $1 billion restructuring.

employees. This restructuring initiative, valued at $1 billion according to the company’s filing with the SEC, is part of Starbucks’ “Back to Starbucks” strategy aimed at enhancing the overall customer experience by optimizing staffing levels in coffeehouses and eliminating underperforming locations.
The Chairman and CEO of Starbucks, Brian Niccol, shared in a public letter on the Starbucks website that the company plans to reduce its U.S. and Canadian locations to fewer than 18,300 by the end of fiscal year 2025. As of June 2025, Starbucks operated 18,734 locations in the region, indicating an approximate 2.3% decrease in retail establishments. Affected employees at these Starbucks stores will be notified of the upcoming changes this week, with efforts to relocate impacted staff to nearby stores wherever feasible.
For those employees unable to be immediately reassigned to alternative retail sites, Starbucks has assured them comprehensive severance packages and the opportunity to return as the company moves forward with new store openings in fiscal year 2026. This round of layoffs for non-retail employees marks the second instance since Niccol assumed leadership in September 2024. In February 2025, Starbucks laid off an additional 1,100 corporate employees in an effort to streamline operations. Non-retail employees will receive notifications on Friday regarding the company’s decisions and will also receive support and severance packages.

Looking ahead, the future of Starbucks under Niccol’s leadership is uncertain. Previous changes implemented by Niccol have not resonated positively with both employees and customers, failing to reverse the downward trend in same-store sales over six consecutive quarters. Despite numerous modifications to the menu and significant reductions in staff, Starbucks has struggled to maintain a strong performance. However, the “Back to Starbucks” plan comprises more than just store closures and workforce reductions; it aims to enhance store operations and customer satisfaction.
While Starbucks will close several locations in the near future, the company intends to expand further, introducing new stores in fiscal year 2026. Additionally, Starbucks aims to renovate over 1,000 retail locations in the upcoming year, aligning them with updated brand standards. Improving the ordering process is a key focus of Niccol’s strategy, aiming to increase efficiency and provide a more pleasant experience for customers. The vision is to have customers receive their Starbucks coffee within 30 seconds of ordering, particularly for brewed coffee, although more complex espresso beverages may take a little longer to prepare. Rapid service is a top priority for Starbucks currently, but whether these swift changes will be effective in revitalizing the company’s financial results remains uncertain.