Starbucks to Lay Off 900 Workers, Close Stores

Written by John R. Smitmithson, Senior Financial Analyst & Columnist

Updated: 25 Sep 25

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Starbucks has announced a $1 billion restructuring plan that includes laying off 900 non-retail employees and closing underperforming stores across the U.S. and Canada. CEO Brian Niccol emphasized these actions are part of a broader turnaround strategy aimed at driving long-term growth. While store closures will reduce the total store count by roughly 1%, Starbucks plans to reinvest savings into improving existing locations and enhancing customer experiences. The company has faced consecutive quarters of declining same-store sales and plans targeted renovations to reinvigorate its brand and attract more customers.

Details of Layoffs and Store Closures

Starbucks has announced its decision to cut 900 corporate jobs and close a number of underperforming stores in North America as part of a $1 billion restructuring effort. The closures are expected to reduce the overall store count in the region by approximately 1% by the fiscal year-end. CEO Brian Niccol emphasized that the company’s review revealed certain locations were unable to meet financial performance targets or provide the customer experience expected of the brand. Employees affected by these changes will be offered severance support, including benefits extensions.

Turnaround Strategy and Reinvestment Plans

The company plans to channel the savings from layoffs and closures into improving store designs and enhancing customer experiences. Starbucks aims to invest in 1,000 locations over the next 12 months, focusing on creating cozier and more welcoming coffeehouse environments, moving away from a pickup-centric model. Additionally, the company is set to execute targeted renovations, allocating approximately $150,000 per location, while simultaneously reducing new store build costs by up to 30%. These efforts include introducing a new stand-alone store prototype with enhanced seating and drive-through capabilities by fiscal 2026.

Challenges and Financial Performance

Starbucks continues to face significant challenges, including six consecutive quarters of declining same-store sales. In the most recent quarter, same-store sales dropped by 2%, driven by a 4% decline in comparable transactions. Analysts attribute this trend to inflationary pressures affecting consumer spending. CEO Niccol, who joined Starbucks a year ago, is leveraging his turnaround expertise to reposition the brand. Under his leadership, the company is reassessing its store portfolio and implementing strategic initiatives to drive long-term growth while addressing immediate financial hurdles.

Sources

Starbucks announces plans cut 900 jobs close stores turnaround struggles continue
yahoo
Starbucks close stores, lay 900 workers turnaround plan
abc
Starbucks lay 900 workers, close stores
abc
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yahoo

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About the author

John R. Smitmithson

With over 15 years of experience in global financial markets, John R. Smitmithson holds a Master’s degree in Finance from the London School of Economics. A former investment strategist at Goldman Sachs, he specializes in macroeconomic trends and equity analysis, contributing authoritative insights to Intellectia’s market overviews.