Starbucks to close stores, cut 900 corporate jobs in $1B restructuring

Highlights:

• Starbucks plans to close roughly 1% of U.S. and Canadian stores, affecting about 200 locations.
  
• Another 900 corporate employees will be laid off under the $1 billion turnaround plan.
  
• CEO Brian Niccol focuses on store upgrades, faster service, and simplified menu to boost traffic.
  

Store closures and corporate layoffs

Starbucks announced it will close a portion of its stores in the U.S. and Canada and lay off 900 corporate employees as part of a $1 billion restructuring plan. The closures are expected to reduce the total number of locations by about 1%, leaving nearly 18,300 stores by the end of the fiscal year.

Turnaround strategy in action

The layoffs follow a previous round of 1,100 corporate cuts in February. CEO Brian Niccol, who joined Starbucks a year ago from Chipotle, has implemented sweeping changes aimed at reversing six consecutive quarters of declining sales. These measures include upgrading stores, hiring more baristas to improve service times, and redesigning cafés to encourage customers to linger.

Menu simplification and customer experience

Niccol’s plan also focuses on simplifying operations, including removing almost one-third of menu options and eliminating upcharges for nondairy milk. The company aims to prepare drinks in four minutes or less and provide a welcoming environment with new ceramic mugs and free refills for in-store customers.

Financial impact and next steps

While early results indicate upgraded stores are seeing higher visit frequency and improved transactions, Starbucks has yet to see a meaningful turnaround in overall financial performance. Niccol noted that some locations were identified as unable to deliver the expected customer experience or meet financial targets, prompting the decision to close them. Following the closures and staff reductions, Starbucks will continue investing in new store openings and renovating more than 1,000 existing locations, using the $1 billion restructuring plan to enhance the customer experience and strengthen its market position.