Starbucks Announces 900 Layoffs and Store Closures — What’s Really Going On?

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SEATTLE - 27 September 2025 — Starbucks Corp. has launched a comprehensive $1 billion restructuring initiative, set to shutter around 500 company-operated stores across North America and eliminate approximately 900 non-retail corporate positions, as the coffee retailer battles a prolonged sales downturn.

The announcement, made Thursday by CEO Brian Niccol, marks the second major round of corporate cuts this year, following the layoff of 1,100 similar roles earlier in 2025.The store reductions, which equate to about a 1% drop in the company's North American footprint for fiscal 2025, target underperforming locations where enhancements to the physical environment or profitability prove unfeasible.Starbucks anticipates concluding the fiscal year on October 1 with roughly 18,300 total outlets in the U.S. and Canada, encompassing both company-operated and licensed venues.

"While we’re making good progress, there is much more to do to build a better, stronger, and more resilient Starbucks," Niccol wrote in a message to employees, acknowledging the tough decisions amid six straight quarters of declining same-store sales fueled by fierce competition and inflation-weary customers. He emphasized redirecting resources "closer to the coffeehouse and the customer" to foster exceptional service and innovation.

The overhaul carries hefty financial implications: $150 million in severance and related employee costs, plus $850 million in charges linked to the closures, with 90% of the overall $1 billion tab—$900 million—hitting the North American segment. The bulk of these expenses are expected in fiscal 2025.

To offset the pain, Starbucks pledged over $500 million for additional labor hours to roll out its "Green Apron Service" enhancements across company-owned cafes, aiming to elevate customer interactions. The company also plans to refresh more than 1,000 existing stores with warmer, more inviting designs in the coming year, while pausing net expansion until fiscal 2026, when growth will resume in promising markets.

For affected workers, baristas at shuttering sites will be prioritized for transfers to nearby stores or offered severance, with the company underscoring its commitment to "generous" support packages including extended benefits.The Starbucks Workers United union, representing about 12,000 baristas, has committed to effects bargaining for any unionized locations to ensure placements align with employee preferences.

Early closures are already in motion, including a dozen in the Chicago area set for this weekend, alongside spots in California and other urban centers flagged for low performance.Niccol noted the emotional weight of these changes, as "coffeehouses are centers of the community," but views them as essential for long-term vitality.

Investors appeared cautiously optimistic, with Starbucks shares ticking up slightly in Friday's after-hours session, signaling hope that Niccol's strategy—unveiled since his September 2024 appointment—will reignite the brand's momentum.