Seattle, WA — Starbucks is making significant changes to its operations, with CEO and chairman Brian Niccol announcing on Thursday that the company will be cutting approximately 900 jobs and closing several underperforming stores in the U.S. and Canada. These decisions are part of a broader company overhaul aimed at strengthening the business and creating a “better, stronger, and more resilient Starbucks”.
What Happened
The announcement follows a comprehensive review of Starbucks’ North American portfolio, identifying stores that fail to meet customer expectations in terms of the physical environment and financial performance. While Niccol did not specify how many stores will close, he confirmed that the number of company-operated locations in North America will decline by approximately 1% in fiscal year 2025.
Despite the closures, Starbucks’ total number of locations across the U.S. and Canada will still grow from 18,300 by the end of fiscal year 2024, up from 8,424 stores in the previous fiscal year. Niccol assured employees and stakeholders that Starbucks is continuing to invest in the business and expanding in other areas.
Who Was Affected
The job cuts will focus on non-retail roles, with approximately 900 positions being eliminated. These positions will be notified on Friday. Niccol emphasized that the company would offer generous severance and support packages, including extensions of current benefits. Additionally, employees who do not need to be on-site have been asked to work remotely on Thursday and Friday.
What Happens Next
The changes come as part of Starbucks’ “Back to Starbucks” plan, initiated by Niccol when he became CEO in September 2024. The initiative is designed to enhance the in-store experience, attract customers back to the company’s locations, and reestablish Starbucks as the “community coffeehouse.”
The overhaul carries a $1 billion price tag, which includes approximately $450 million for early lease terminations and $150 million for severance costs, as reported in an SEC filing.
Public and Employee Reactions
The move has sparked mixed reactions, especially from employees affected by the layoffs. Niccol acknowledged the difficult impact these changes have on Starbucks’ employees, stating, “I know these decisions impact our partners and their families, and we did not make them lightly.” He assured stakeholders that these changes are necessary to help the company strengthen its impact on communities and create more opportunities for its partners.
Starbucks’ ongoing commitment to community building and its future growth will be tested in the coming months as the company navigates this challenging period.
This story may be updated with more information as it becomes available.
