Starbucks to close stores, lay off workers in $1 billion restructuring plan

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Starbucks announced a $1 billion restructuring plan Thursday that involves closing some of its North American coffeehouses and laying off more workers as it moves ahead with its "Back to Starbucks" transformation under CEO Brian Niccol.

The number of company-operated stores in North America will decline by about 1% in fiscal year 2025, accounting for both openings and closures, the company said in an SEC filing. Starbucks operated more than 11,400 locations in North America as of June 29, suggesting that more than 100 cafes will shutter their doors as part of the restructuring plan.

Approximately 900 non-retail employees will be laid off on Friday, Starbucks said.

Starbucks estimates that 90% of the expected $1 billion restructuring cost will be attributable to the North America business. In total, the company expects to incur about $150 million in employee separation costs, plus about $850 million in restructuring charges related to the store closures, according to the filing. A significant portion of expenses will be incurred in fiscal year 2025, it said.

Starbucks said in the filing it is prioritizing investment "closer to the coffeehouse and the customer" as it looks to reverse a sales slump in its biggest market. The company's same-store sales have fallen for six straight quarters, hurt by increased competition and price-conscious consumers.

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Starbucks executives had previously said that the company would be slowing new openings in favor of remodeling existing locations this year. The renovated cafes are meant to encourage customers to linger, taking the coffee chain back to its roots as a "third place" for consumers, outside of home and the office.

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