Starbucks announced a major $1 billion restructuring plan Thursday, signaling a renewed push to reshape its North American operations under CEO Brian Niccol’s “Back to Starbucks” transformation. The plan involves closing a portion of company-operated coffeehouses and laying off approximately 900 non-retail employees, marking the second round of corporate layoffs during Niccol’s tenure. Earlier this year, 1,100 corporate positions were eliminated as part of efforts to streamline operations.
According to the company’s Securities and Exchange Commission filing, the number of company-operated stores in North America is expected to decline by roughly 1% in fiscal 2025, taking into account both openings and closures. Analysts at TD Cowen estimate that figure represents about 500 gross closures. Starbucks anticipates that 90% of the total $1 billion cost will stem from North American operations, including roughly $150 million in employee separation expenses and $850 million in restructuring charges related to the store closures, with the majority of costs hitting the fiscal 2025 budget.
Despite the closures, Starbucks plans to end the year with nearly 18,300 locations across North America, including both company-operated and licensed cafes, and expects to resume growth in fiscal 2026. The company is prioritizing investment closer to the customer experience, focusing on initiatives that can reverse a six-quarter slide in same-store sales. CEO Brian Niccol emphasized that the company has identified locations where it is unable to deliver the desired customer environment or achieve financial targets, prompting the closures. Baristas affected by the moves will either be reassigned to nearby stores or receive severance packages.
The restructuring aligns with Niccol’s broader strategy to reinvigorate Starbucks as a customer-centric “third place” outside the home or office. Earlier this year, the company unveiled its “Green Apron Service” initiative, the largest-ever labor and operating investment in company-owned cafes, dedicating over $500 million toward labor hours and service improvements. Niccol has also implemented operational changes such as a return to four days in-office work and the introduction of a new executive team, including CFO Cathy Smith, Global Chief Brand Officer Tressie Lieberman, and COO Mike Grams—executives with prior experience alongside Niccol at Chipotle and Yum Brands.
Starbucks Workers United, which represents 12,000 baristas across more than 650 cafes, said it will engage with the company to ensure workers impacted by closures are properly reassigned or compensated. Following the announcement, Starbucks shares fell slightly, down less than 1% in afternoon trading, with the stock having declined more than 8% year-to-date. Niccol emphasized in a letter to employees that the restructuring steps are designed to reinforce what works, prioritize resources effectively, and build a stronger, more resilient Starbucks that deepens its impact on partners, suppliers, and the communities it serves.
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