Starbucks to shutter hundreds of stores, cut about 900 corporate jobs in turnaround push

Starbucks said Friday that it will lay off about 900 non-retail employees and close hundreds of stores in the United States and Canada as part of a broader turnaround plan. The actions, disclosed amid the company’s effort to refocus resources, mark the second company-wide layoff this year. Corporate staff slated for separation will be notified early Friday, with store-closure announcements expected to roll out in the coming days after a review found many locations underperformed financially and some cafes did not meet the customer experience standards the company is pursuing.

Starbucks said it expects to finish its fiscal year with roughly 18,300 North American stores, down 124 from a year earlier; the company counted 18,734 North American locations in June. The layoffs will remove about 1% of its corporate workforce. CEO Brian Niccol, a turnaround specialist who previously led Chipotle Mexican Grill to growth, has pushed for a calmer cafe environment, simpler menus and enhanced service, in the hope of boosting traffic and profitability.

Niccol wrote in a letter that "Each year, we open and close coffeehouses for a variety of reasons, from financial performance to lease expirations," and acknowledged that the current actions are more significant than past adjustments. He said the company understands the impact on partners and customers and emphasized that closing any location is difficult. Executives described store closures as necessary to concentrate on stronger performers and better locations. The move comes as Starbucks has been refining its in-store experience, including efforts to create more comfortable dining areas, with printed newspapers, simpler menus and hot coffee served in mugs.

Starbucks also said it will offer severance packages and other support for affected employees, along with assistance programs to smooth transitions for workers and store teams. The company noted that it does not take such decisions lightly and stressed that the changes are aimed at restoring profitability while preserving the long-term value of the brand. Analysts have described the steps as a significant shift for a company that has historically expanded its footprint even during years of competitive pressure.

While store closings have been a common corrective tool for retailers during downturns, it remains relatively unusual for Starbucks to trim its store count mid-year. The company has posted six consecutive quarters of sales declines, according to the notes, prompting leadership to pursue a broader reset of its operations, menu offerings and cafe atmosphere. If successful, the turnaround could set the stage for renewed growth as the economy and consumer spending evolve, though the road ahead remains uncertain for a brand navigating labor costs, lease terms and shifting competition in the fast-casual sector.