Starbucks announced Thursday that it will lay off 900 corporate employees and close hundreds of stores across North America as part of a sweeping $1 billion restructuring plan. The decision, unveiled by CEO Brian Niccol in a letter to employees, marks the second round of layoffs since he took over the company in August 2024.
Earlier this year, Starbucks cut 1,100 headquarters jobs as part of its effort to restructure operations and refocus resources on frontline retail. Niccol explained that the latest decision is “grounded in putting our resources closest to the customer so we can create great coffeehouses, offer world-class customer service, and grow the business.”
As part of the restructuring, Starbucks will close roughly 1% of its North American stores, reducing its footprint from 18,734 locations in June to about 18,300. At the same time, the company says it will upgrade more than 1,000 stores over the next year to create “greater texture, warmth, and layered design.”
In a filing with the Securities and Exchange Commission, Starbucks estimated restructuring costs at $1 billion, including $850 million for closures and remodeling and $150 million for employee separation packages. Corporate employees affected by the layoffs will be notified Friday and will receive severance pay, extended benefits, and support services.
Two high-profile closures are planned in Starbucks’ home city of Seattle: the Capitol Hill Roastery and the Reserve store in the SoDo neighborhood. The Roastery had been unionized, but Starbucks said union status did not factor into its decision to shutter the location.
The restructuring follows Starbucks’ July 2024 mandate that corporate employees relocate near Seattle and work in person four days per week. The move, company leaders argued, was designed to strengthen culture and improve performance after years of lagging sales and rising costs.
Niccol defended the cuts as part of a long-term plan to stabilize and expand the business. “I believe these steps are necessary to build a better, stronger, and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers, and the communities we serve,” he wrote.
