Starbucks has unveiled a major restructuring plan that will reshape its North American footprint and corporate staffing. Under CEO Brian Niccol, the coffee giant plans to eliminate approximately 900 non-retail jobs and shutter over 100 stores—part of a cost-cutting, revitalization initiative aimed at halting declining sales and restoring Starbucks’ “coffeehouse” identity.
The closures and staff cuts come at a delicate time: after six consecutive quarters of disappointing performance in the U.S., Starbucks is scrambling to reinforce its brand, improve in-store experience, and streamline operations.
What Starbucks Announced: Restructuring Plan Details
Job Cuts
The company confirmed that the layoffs will target non-retail, support, and corporate roles, rather than frontline barista positions. These 900 job eliminations follow earlier cuts this year, including 1,100 corporate roles in February.
Affected employees are expected to receive severance packages and be offered opportunities to relocate, where feasible.
Store Closures
Starbucks stated it would close stores that are underperforming or no longer aligned with its brand vision for a high-quality coffeehouse experience.
While the company did not initially list all locations, observer reports and compiled databases show closures across many states and regions.
In North America, company-operated store count is expected to decline about 1% by the end of fiscal 2025—down from approximately 18,734 to about 18,300 stores.
In markets such as California (San Francisco Bay Area), Texas (Houston area), and other U.S. states, specific closures have been reported, including well-known locations in San Francisco’s Castro district and the Fisherman’s Wharf area.
Financial and Operational Impact
Starbucks estimates that this restructuring will cost around US$1 billion, including store closure expenses, severance, and disruption costs.
About 90% of that cost is attributed to North America, where Starbucks maintains much of its global footprint.
As part of the plan, Starbucks says it will also invest in remodeling and revitalizing more than 1,000 stores, introducing updates in layout, ambiance, and design to boost customer experience.
Why Starbucks Is Taking Such Drastic Measures
Declining U.S. Sales and Consumer Fatigue
Starbucks has posted six straight quarters of sales decline in the U.S., a trend it cannot ignore. Consumers, facing inflation and more cautious spending, have become selective about premium coffee purchases.
The closures are aimed at removing stores that no longer meet the expectations of experience or performance, boosting the overall brand appeal and profitability.
Focus on Store Experience & Differentiation
Under Niccol’s “Back to Starbucks” strategy, the company is pushing a return to a more classic coffeehouse ambience, with shorter wait times, more comfortable seating, textured interiors, and a richer in-store atmosphere.
The idea is that rather than expanding aggressively, Starbucks should deploy resources to support its best-performing locations and lift underperforming ones through design and operational enhancements.
Cost Discipline & Operational Efficiency
By trimming support roles and eliminating open/unfilled positions, Starbucks wants to sharpen its cost structure. The company also plans to freeze hiring in many departments as part of the cost control effort.
Some of the closures are driven by lease expirations or locations failing to meet financial targets over time—factors already under management scrutiny.
Where Starbucks Stores Are Closing (What We Know)
Although Starbucks has not released a definitive full list, reporting and aggregated data suggest these trends:
- San Francisco Bay Area, California: Multiple closures in San Francisco proper, East Bay, and North Bay. Locations in Fisherman’s Wharf, Castro District, Oakland, Berkeley, Danville, Santa Rosa, and Sebastopol are among those cited.
- Houston, Texas area: Stores along Montrose Blvd, Studemont St, and other local branches are being closed.
- Other states: Starbucks closures are reportedly happening across states, including Washington, Oregon, Virginia, Maryland, New Jersey, Massachusetts, New Mexico, D.C., and others.
- Bay Area “Bearbucks”: The unionized Castro District store “Bearbucks” (4094 18th St) is among those closing, adding to tension among union supporters.
These closures largely target stores that the company deems unable to deliver the desired environment or performance, rather than being driven by unionization status.
Reactions & Pushback
Union and Worker Criticism
Starbucks Workers United has criticized the cuts, arguing that the company is failing to focus on the very partners (employees) who deliver day-to-day customer experience.
Union statements claim the restructuring places a disproportionate burden on workers, with limited involvement in decision-making. They argue that store viability should not override worker welfare.
In areas like San Francisco, closures of unionized locations have drawn scrutiny, though Starbucks maintains that store performance—not union status—is the determining factor.
Investor and Market Response
Following the restructuring announcement, Starbucks shares showed little dramatic movement, though the stock has declined ~7–8% year-to-date, underperforming the broader market.
Some analysts see the moves as necessary short-term pain for longer-term sustainability. Others caution that closures and layoffs risk eroding brand strength and customer loyalty.
Risks & Challenges Ahead
The strategy is bold but laden with challenges:
- Reopening or Replacing Closed Stores: Starbucks must ensure closures do not alienate customers in affected neighborhoods permanently.
- Corporate Culture & Morale: Layoffs and store shutdowns can sap internal morale and trust among remaining staff.
- Union Negotiations: With over 650 unionized stores in the U.S., tensions may flare if perceived as union targeting.
- Execution Risk: The success of redesigned stores depends on consistency, quality execution, and consumer reception.
- Brand Perception: Negative press around “cutting back” may contrast with the brand image built on community, warmth, and consistency.
Opportunity & Renewal: The Other Side
Despite the risks, the restructuring also offers paths to renewal:
- Better Focus on Profitable Stores: Starbucks can concentrate capital and innovation on locations with the highest returns.
- Store Redesign & Uplift: The 1,000+ store redesign plan could reinvigorate store appeal, aligning aesthetic, comfort, and functionality.
- Efficiency Gains: Leaner corporate structure and tighter operations may improve margins.
- Strategic Expansion Later: Niccol has indicated that after stabilization, Starbucks intends to grow its footprint again.
Niccol has claimed early results from store uplifts have shown increased dwell time, repeat visits, and positive customer feedback.
Context: Starbucks Past Restructurings & Store Strategy
Starbucks has a history of store closures and corporate trimming in response to economic and market challenges. For example:
- In 2008, amid the global downturn, Starbucks closed 600 underperforming U.S. stores and cut nearly 1,000 jobs.
- During the COVID-19 pandemic, many “café-only” stores were closed or converted, while Starbucks leaned more into drive-thru, pickup, and smaller formats.
This current restructuring is among the most aggressive in its modern era, particularly given the scale of cuts and closures announced simultaneously.
What Affected Partners & Customers Should Know
- Employees at impacted stores or corporate functions should look out for official notice and severance or transfer options.
- Customers should check the Starbucks app or store locator for changes in opening hours or permanent closures.
- Communities losing stores may see local economic or social impact, especially where Starbucks functioned as a “third place” hub.
- Investors should track quarterly performance, execution on store redesign, and return to growth to assess the success of the plan.
Starbucks’ decision to cut 900 jobs and close over 100 stores under its $1 billion restructuring plan marks a watershed moment for the coffee chain. Spearheaded by CEO Brian Niccol, the move is designed to address sagging U.S. sales, reinforce store quality, and refocus corporate resources for long-term resilience.
While the plan raises tough challenges—employee morale, brand risk, and precise execution—Starbucks sees it as necessary to reinvent itself to change consumer behavior and market dynamics. Whether this bold strategy succeeds or stumbles, Starbucks is staking its future on a leaner, more appealing, and focused footprint.
