Starbucks to close hundreds of stores, lay off 900 workers as part of
turnaround plan
[September 26, 2025] By
DEE-ANN DURBIN
Starbucks said Thursday it's closing hundreds of stores in the U.S.,
Canada and Europe and laying off 900 nonretail employees as it focuses
more of its resources on a turnaround.
The Seattle coffee giant said store closures would start immediately.
Starbucks said affected baristas will be offered severance packages and
transfers to other locations where possible.
The company wouldn't give a number of stores that are closing, but the
bulk of the closures appear to be in the U.S. and Canada. Starbucks said
it expects to have 18,300 North American locations when its fiscal year
ends on Sunday. As of June 29, the company had 18,734 locations.
In a research note Thursday, TD Cowen analyst Andrew Charles estimated
Starbucks will close around 500 North American stores in its fiscal
fourth quarter.
In a letter to employees in Europe, Starbucks Chairman and CEO Brian
Niccol said some locations in the U.K., Austria and Switzerland will
also be closing. Starbucks didn't say how many stores will be impacted
on those nations, either.
Starbucks said it will notify nonretail employees whose positions are
being eliminated early Friday. Starbucks asked employees who can work
from home to do so on Thursday and Friday.
In a letter sent to employees Thursday, Niccol said a review of the
company's stores identified locations where the company doesn't see a
path to financial stability or isn't able to create the physical
environment customers expect. Those stores are being closed.
“Each year, we open and close coffeehouses for a variety of reasons,
from financial performance to lease expirations,” Niccol wrote. “This is
a more significant action that we understand will impact partners and
customers. Our coffeehouses are centers of the community, and closing
any location is difficult.”
Starbucks said it expects to spend $1 billion on the restructuring,
including $150 million on employee separation benefits and $850 million
related to the physical store closing and the cost of exiting leases.
Starbucks shares fell 1% Thursday.
It was not immediately clear how many of the stores that are closing are
unionized. Workers at 650 company-owned U.S. Starbucks stores have voted
to unionize since 2021, but they have yet to reach a contract agreement
with the company.
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Shoppers at the Walden Galleria in Buffalo, NY, stop by the
Starbucks kiosk on Saturday, Nov. 30, 2024. (AP Photo/Gene J. Puskar,
File)
Starbucks Workers United, the labor group organizing workers, said
Thursday that the closures were made without input from Starbucks'
baristas. The union said it intends to engage in bargaining at every
union-represented store that is closing to ensure workers can be placed
at another store they prefer.
“Fixing what’s broken at Starbucks isn’t possible without centering the
people who engage with the company’s customers day in and day out,” the
union said.
News of the store closures arrived just over a week after unionized
employees in three states sued Starbucks over its new dress code, saying
the company refused to reimburse workers who had to buy new clothes.
Starbucks said it used a consistent set of criteria to determine the
stores that are closing and union representation wasn't a factor.
Starbucks will end its 2025 fiscal year with 124 fewer North American
stores than its previous fiscal year. It’s rare for Starbucks to shrink
its store count during a fiscal year.
Starbucks plans to increase its North American store count in its next
fiscal year, Niccol said. The company said it also plans to redesign
more than 1,000 locations in the next 12 months to give them a warmer,
more welcoming feel.
This is the second round of layoffs at Starbucks this year. In February,
Niccol announced the layoffs of 1,100 corporate employees globally and
eliminated several hundred open positions. At the time, Niccol said
Starbucks needed to operate more efficiently and increase accountability
for decisions.
Niccol is a turnaround specialist who was brought into Starbucks a year
ago this month to give the brand a jolt. Under Niccol's leadership, the
struggling Chipotle chain, where Niccol was CEO for about 6 years,
essentially doubled its revenue and its profit, and its stock price,
soared.
In July, Starbucks reported its sixth straight quarter of lower
same-store sales, as weak U.S. traffic continued to be a drain on the
company. Niccol is trying to turn that around by adding staff, making
stores cozier and introducing software that helps prioritize orders and
make sure customers can get their drink within four minutes.
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