Starbucks To Close Stores And Lay Off Employees As Part Of A $1 Billion Restructuring Plan

In its continued attempt to turn around flagging sales numbers, Starbucks announced on Thursday, September 25, 2025, that in the coming days the company will begin closing stores across North America, as well as laying off approximately 900 non-retail employees. This $1 billion restructuring (per the company's SEC filing) comes as part of the brand's "Back to Starbucks" plan, an attempt to improve the overall customer experience across the company by increasing the number of staff in the coffeehouses and removing locations that do not meet financial or aesthetic standards.

In a public letter posted to the Starbucks website, chairman and CEO Brian Niccol stated that at the end of fiscal year 2025, the company will have fewer than 18,300 locations across the U.S. and Canada. At the end of June 2025, the company was operating 18,734 locations in this region, indicating a decrease of roughly 2.3% in retail shops. Employees in the affected Starbucks locations will be notified of the changes this week. The company has stated its intent to transfer affected employees to nearby locations wherever possible. 

For those that cannot be immediately placed in another retail location, the company has promised comprehensive severance packages, as well as an invitation to return as the company moves forward and begins opening new coffee shops in fiscal year 2026. This is the second round of layoffs for non-retail Starbucks employees since Niccol took charge of the company in September of 2024. In February of 2025, the company laid off an additional 1,100 corporate employees, an action intended to streamline the company's operations. Non-retail employees will be notified on Friday of the company's decisions, and have also been promised support and severance packages.

To date, Niccol's big changes to Starbucks have left both baristas and customers unhappy. On top of that, the changes have not been able to break the six-quarter trend of decreased same-store sales. Despite the many cuts to the Starbucks menu and the significant reductions in staff under Niccol's watch, the company has simply been flagging. But the "Back to Starbucks" plan has more to it than just reducing the number of stores and non-retail staff. The goal is to improve both the efficiency and the overall feel of the stores.

Despite closing hundreds of locations in the coming days, Starbucks does plan to continue to grow, with new locations opening in fiscal year 2026. Additionally, in the coming year, the company plans to renovate more than 1,000 of its retail locations, bringing the coffee shops in line with updated brand standards. On top of new-and-improved spaces, the ordering experience is the next focus of Niccol's plan. A stated goal is to add more staff to Starbucks locations, creating a faster and friendlier experience. 

In his vision, 30 seconds after ordering, you'd have a Starbucks coffee in your hand — for brewed coffee at least. For more complicated espresso drinks, he allows that it would still take a few minutes. High speed is certainly a priority for Starbucks right now, but whether or not these fast cuts are what the company needs to turn its financial fortunes around remains to be seen.