Starbucks to close hundreds of stores as part of turnaround plan
Summary
Starbucks announced it will close hundreds of stores across the U.S. and Canada and lay off about 900 non-retail employees as part of a major turnaround effort. The company said closures begin immediately and expects to have 18,300 North American locations at the end of its fiscal year — 124 fewer than a year earlier. As of 29 June it had 18,734 locations.
The company will offer transfers or severance to store staff where possible. Starbucks expects the restructuring to cost roughly $1 billion, including $150 million for employee separation benefits and $850 million for store closures and lease exits. CEO Brian Niccol said a review identified stores without a clear path to financial stability or the right physical environment for customers, and those sites will be shut.
Starbucks said union representation was not a factor in the site selection process; union organisers dispute that and plan to bargain over closures at union-represented stores. This follows earlier layoffs in February that cut around 1,100 corporate roles. Niccol, hired a year ago to drive a turnaround, has also outlined plans to redesign more than 1,000 stores and to boost staffing and software to speed service.
Key Points
- Starbucks will close hundreds of stores in the U.S. and Canada and lay off 900 non-retail employees.
- The company expects 18,300 North American stores at fiscal year end, a net decline of 124 from the prior year.
- Starbucks forecasts a $1 billion charge for the restructuring: $150m for separation benefits and $850m for store-closing and lease-exit costs.
- Store employees affected will be offered transfers where possible and severance packages.
- The company says union status didn’t factor into decisions; union organisers say closures occurred without baristas’ input and plan to contest placements.
- CEO Brian Niccol, a turnaround specialist, has already cut corporate roles earlier in the year and plans more store redesigns and operational changes.
- Starbucks reported its sixth straight quarter of lower same-store sales, prompting the aggressive restructuring.
Why should I read this?
Quick and blunt: if you work for Starbucks, live near one, invest in retail or follow union fights, this matters. It’s not just about fewer cafés — it’s jobs, local high-street impact, lease fallout and a big strategic bet from a new CEO trying to turn the brand around fast. We’ve skimmed the detail so you don’t have to — but you should probably read the bit about the costs and the union angle if any of that touches you.
Context and relevance
This move fits a broader retail trend of pruning underperforming physical locations while investing in higher-performing sites and technology. For Starbucks, the closures mark a notable contraction during a fiscal year and signal a tougher stance on efficiency under Niccol, who previously led Chipotle through rapid growth. The story matters for commercial landlords, employees, customers and investor sentiment — and it underscores ongoing tensions between corporate restructuring and unionisation efforts across the sector.
