A big shift for a beloved brand
If you’ve ever started your morning with a latte from Starbucks, this news might surprise you. Starbucks just announced a major $1 billion restructuring plan, and it’s not small talk—it includes closing hundreds of stores across North America and laying off about 900 employees. For many of us, Starbucks is more than just coffee; it’s a place to meet friends, grab a quick pick-me-up, or even sit down with a laptop. So when the company says it’s cutting back, people notice.
Why Starbucks is making these moves
The changes come as part of what CEO Brian Niccol is calling the “Back to Starbucks” transformation. The goal, he says, is to bring the company closer to customers and refocus on what makes Starbucks special. But behind that vision is a reality check: sales have been down for six straight quarters. Competition is heating up, and customers are becoming more price-conscious, especially with inflation still squeezing wallets.
Starbucks knows it can’t keep doing business the same way. The closures and layoffs are their way of trimming down in order to rebuild stronger.
How many stores will close?
Here’s the part that hits home: Starbucks expects to close about 500 company-operated stores in North America during fiscal year 2025. That works out to roughly 1% of its footprint. Now, Starbucks isn’t going away—far from it. By the end of the year, the company still expects to have around 18,300 locations across the U.S. and Canada, including both company-owned and licensed cafes. But clearly, not every store is staying open.
According to Niccol, some stores just don’t have the right physical environment for customers, while others aren’t performing financially. In short, if a location isn’t working, it’s on the chopping block.
What about the workers?
Job losses are always tough. About 900 non-retail employees—corporate and support staff—will be laid off as part of this restructuring. This is actually the second round of cuts under Niccol’s leadership. Earlier this year, about 1,100 corporate workers were also let go.
For baristas and store workers, Starbucks says employees at closing locations will be offered transfers to nearby stores. If that’s not possible, they may receive severance packages. The union representing Starbucks workers, Starbucks Workers United, has already said it plans to negotiate with the company to make sure employees are treated fairly.
The cost of restructuring
Shutting down stores and reshaping the business doesn’t come cheap. Starbucks estimates this restructuring will cost about $1 billion. Around $150 million of that will go toward employee separation costs—basically, layoffs—while $850 million will cover store closures and related expenses. Most of these costs will hit in fiscal year 2025.
But here’s the plan: after tightening things up next year, Starbucks wants to start expanding again in 2026. Think of it like pruning a tree—cutting back now so it can grow stronger later.
Starbucks’ big-picture vision
Even as it makes cuts, Starbucks is also investing in what it calls “Green Apron Service.” This initiative is about pouring more resources into customer experience and employees in stores, including a $500 million investment in labor hours across company-owned cafes. The idea is simple: give baristas more support, and customers will feel the difference.
Niccol has been clear that he wants Starbucks to be not just a coffee company but one of the world’s greatest customer service brands. That means stores designed to encourage people to linger again—like the old “third place” idea that Starbucks was once famous for, a spot that’s not home and not work, but somewhere in between.
What it means for customers like you
So, will your local Starbucks close? It’s possible, but not guaranteed. The company hasn’t released a list yet, but it’s targeting underperforming stores or those in locations that just don’t work anymore.
Even if some shops close, Starbucks will still have thousands of locations across North America. You’ll still be able to find your favorite drink nearby. The bigger shift will be in how Starbucks operates—fewer weak spots, more focus on customer service, and hopefully a return to its original feel.
Looking ahead
If you take one thing from all this, it’s that Starbucks is trying to hit the reset button. Yes, some stores are closing, and yes, jobs are being lost. But the company is betting big—$1 billion big—that these changes will set it up for a stronger future.
For customers, it might mean fewer Starbucks in some neighborhoods, but also better experiences in the ones that remain. For employees, it means uncertainty now but potentially more stability later.
Change is never easy, especially when it involves a brand so woven into daily life. But as Starbucks trims down and retools, the hope is that your next cup of coffee won’t just taste good—it’ll feel like part of something stronger and more focused.
