Starbucks is closing stores and laying off 900 people in $1 billion restructuring 

Starbucks will end the year with fewer stores and fewer employees. But the brand maintains that it’s all part of a greater turnaround still in the mix.

Today, the company announced that its North American store locations will be reduced by 1% for fiscal 2025—landing the coffee chain at 18,300 stores total.

And it will be eliminating 900 jobs outside of its coffee houses (in other words, corporate and other functions).

The company claims it will attempt to place affected baristas into new stores, but Starbucks says, “For those we can’t immediately place, we’re focused on partner care including comprehensive severance packages. We also hope to welcome many of these partners back to Starbucks in the future as new coffeehouses open and the number of partners in each location grows.”

CEO Brian Niccol has been at the helm for a year now, where he’s been unable to break a six-quarter streak of same-store sales declines. He’s promised a Back to Starbucks turnaround centered on better store design, operations, and customer experience.

But as he faces the scrutiny of an impatient Wall Street, the former Chipotle chief appears to be reallocating spending to drive the company’s growth while offsetting overhead.

Closures today; growth tomorrow

A closer examination of the details around this restructuring spot a somewhat finer narrative than sheer cost-cutting—and Starbucks insists that Niccol’s aggressive growth plan, in which he’ll add to store count in 2026 and imagines reaching 100,000 stores globally one day, is still intact.

Speaking just last week at the Fast Company Innovation Festival, he promised to add “hundreds of thousands” of seats back to Starbucks stores. The company will have actually closed hundreds of stores over the course of 2025, but it’s been opening enough new stores to offset the figure significantly for this final announced tally.

In a public letter published to the Starbucks website on Thursday, Niccol argues that it’s the sort of fine tuning required to improve the brand.

“Our goal is for every coffeehouse to deliver a warm and welcoming space with a great atmosphere and a seat for every occasion,” he wrote. “During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed.”

When asked if store closures were disproportionately focused on union locations, Starbucks told Fast Company that union represented status was not a factor in the decision.

In any case, the larger restructuring does support Niccol’s greater thesis—that in offering higher touchpoint service, it will continue to raise the bar of expectations from its stores and employees.

As Niccol mentioned during Q3 earnings, “We plan to complete an evaluation of our North American portfolio by the end of this fiscal year to ensure we have the right coffeehouses in the right locations to drive profitability and deliver the Starbucks experience.”

So now that this is done . . . can we finally get back to Starbucks?

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