Starbucks to cut 900 jobs, close hundreds of stores in $1B restructuring

Starbucks said Thursday it would shutter underperforming stores in North America and cut 900 jobs in a $1 billion restructuring effort, as CEO Brian Niccol presses ahead with a plan to revive the coffeehouse chain’s fortunes. The move comes as the company has posted six straight quarters of sales decline in the United States, with consumers cutting back on discretionary coffee purchases and competition intensifying from rivals and premium beverage offerings.

Most of the closures will be in North America, and the company expects the majority to be completed by the end of its fiscal year. Starbucks said it would reduce its North American company-operated store count by about 1%, ending the year with nearly 18,300 total locations across the United States and Canada, both company-operated and licensed. Those figures compare with 18,734 locations disclosed in its July regulatory filing. "During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed," Niccol said in a letter to employees.

Investors have followed Niccol’s strategy with cautious optimism, noting that the former Chipotle executive has prioritized faster service, a more welcoming store atmosphere and a leaner corporate structure as a path to profitability. Dave Wagner, portfolio manager at Aptus Capital Advisors, which holds Starbucks stock, said the company’s plan could gain traction as the details become clearer and execution accelerates. "I continue to like the turnaround story here as we gain more visibility into the future. The company has always invested in innovation and becoming more lean will enhance the story moving forward," Wagner said.

Starbucks said the job cuts would be in its support teams and that the company would close many open positions. The company employed about 10,000 people in non-coffee-house roles in the United States as of Sept. 29, 2024. "This is a more significant action that we understand will impact partners and customers," Niccol said. At the same time, Starbucks is investing to improve staffing and incorporate technology to more efficiently sequence orders at its coffee shops and enhance customer experience.

The broader push includes previously announced steps to streamline operations. Earlier this year, Starbucks said it would eliminate about 1,100 corporate roles and, in August, announced a modest 2% wage hike for all salaried employees in North America. Analysts have noted that the combined actions—store closures, job cuts and pay adjustments—signal a shift toward rebuilding profitability through improved store performance and tighter cost control rather than relying solely on top-line growth.

Starbucks shares were down marginally in early trading, a reaction that contrasted with the stock’s positive run since Niccol took over in August 2024. The stock has risen roughly 9% since his appointment, underscoring investor hopes that a revised store operating model and a leaner cost base could help the company rebound as the macro environment for consumer spending remains uneven.

The closures come as Starbucks continues to navigate a challenging environment for premium-priced beverages in the United States. The company has faced a pullback in discretionary spending and intensified competition from both traditional coffeehouse rivals and new beverage formats. Niccol’s plan emphasizes improving the in-store experience, reducing service times, and aligning store footprints with profitability, even as it reshapes its human resources and technology backbone. Executing these changes will require not only real estate discipline but also a sustained focus on staffing, training and store-level execution to restore confidence among customers and partners alike.

Starbucks says the majority of the reductions will be completed by year-end, and the company anticipates that the net effect will be a smaller, more efficient footprint that prioritizes high-performing locations and a more consistent customer experience. While the road ahead remains complex, Niccol’s approach—combining selective store closures with investments in staffing and technology—seeks to re-anchor the brand around speed, environment and value for the consumer, with the goal of restoring momentum over the medium term.