Coffee giant to shutter locations that can’t meet brand standards and cut 900 corporate roles as part of strategy to refocus on customer experience
Starbucks Corporation announced a sweeping $1 billion restructuring plan on September 23, aimed at streamlining operations and redirecting resources toward improving the customer experience as part of CEO Brian Niccol’s “Back to Starbucks” strategy.
The Seattle-based coffee chain will close underperforming locations and eliminate approximately 900 non-retail corporate positions, with 90 percent of the restructuring costs concentrated in its North America business. The company expects to complete most store closures by the end of fiscal 2025, with a significant portion of the charges hitting this fiscal year.
Since taking the helm as chairman and CEO, Niccol has been laser-focused on what he calls getting “back to Starbucks” – emphasizing coffeehouse atmosphere, customer service, and financial performance. The restructuring represents his most significant operational move yet in the turnaround effort.
“Our goal is for every coffeehouse to deliver a warm and welcoming space with a great atmosphere and a seat for every occasion,” Niccol wrote in a letter to North America partners dated September 25. The company identified locations where it cannot create the expected physical environment or achieve adequate financial performance.
While Starbucks didn’t specify the exact number of store closures, the company indicated its overall North America company-operated store count will decline by about 1 percent in fiscal 2025 after accounting for new openings. Based on typical store counts, this suggests roughly 130-140 locations could be shuttered. The company will end the fiscal year with nearly 18,300 total locations across the U.S. and Canada, including both company-operated and licensed stores.
The restructuring will generate approximately $400 million in non-cash charges related to asset impairment and disposal, with the remaining $600 million representing future cash expenditures for employee separation benefits and lease exit costs. The breakdown includes $150 million for employee separation benefits, $400 million for store asset disposal and impairment, and $450 million primarily for accelerated lease amortization.
Starbucks is simultaneously investing in store improvements, planning to “uplift” more than 1,000 locations over the next 12 months with enhanced texture, warmth, and layered design elements. Early results from coffeehouse uplifts show customers visiting more frequently, staying longer, and providing positive feedback.
The corporate headcount reduction affects approximately 900 current non-retail positions while also closing many open roles. Impacted employees will receive notification this week, with the company offering comprehensive severance packages and benefits extensions.
“As we build toward a better Starbucks, we’re investing in green apron partner hours, more partners in stores, exceptional customer service, elevated coffeehouse designs and innovation to create the future,” Niccol explained, referring to the company’s barista employees as “partners.”
The restructuring reflects Starbucks’ broader strategy to concentrate resources closer to customers and coffeehouses rather than corporate overhead. Where the company has increased barista staffing during peak hours, it has observed improvements in transactions, sales, service times, and employee engagement.
Starbucks plans to resume growth in fiscal 2026, expanding the number of company-operated coffeehouses as it continues investing in the business. The company’s approach represents a classic retail consolidation strategy – closing underperforming locations while doubling down on successful formats and prime real estate.
For affected employees, Starbucks is working to offer transfers to nearby locations where possible and has expressed hope to welcome many back as new stores open and staffing needs grow. The company emphasized that the difficult decisions were necessary to build “a better, stronger and more resilient Starbucks.”
The restructuring signals Niccol’s commitment to operational discipline while maintaining the brand’s community-focused identity – a balancing act that will be closely watched by investors and industry observers as the coffee giant works to reignite growth in an increasingly competitive market.
