By Harshit | September 25, 2025 | Seattle, Washington | 11:00 AM PDT
Starbucks is taking decisive steps to address slowing growth, announcing the closure of hundreds of cafés across North America and a second round of layoffs at its corporate headquarters. CEO Brian Niccol outlined the plan Thursday as part of a broader effort to streamline operations and reposition the company for long-term growth.
Store closures and footprint review
Niccol said the closures, which will affect roughly 1% of the company’s North American locations, come after a comprehensive review of Starbucks’ footprint. By the end of September, Starbucks will reduce its store count from 18,734 to approximately 18,300.
The CEO noted that locations set for closure are those “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.” He emphasized that the closures are more substantial than typical adjustments, reflecting a strategic effort to focus on high-performing locations.
“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,” Niccol said.
Corporate layoffs
Alongside the store closures, Starbucks announced an additional 900 layoffs at its corporate offices, building on roughly 1,000 cuts made earlier in February. Affected employees will be notified on Friday and will receive severance and support packages. Many open corporate positions will also be closed as part of the restructuring.
Financial impact
Starbucks expects the restructuring plan to cost around $1 billion. Despite the immediate costs, Niccol expressed confidence that the changes will allow the company to return to growth, enhance operational efficiency, and provide better experiences for customers.
Shares of Starbucks (SBUX) were flat in premarket trading following the announcement.
Remodelling and growth plans
In addition to closing underperforming stores, Starbucks plans to remodel more than 1,000 cafés, introducing a refreshed design with cozier seating, more power outlets, and warmer colors. The move is intended to create more inviting spaces that encourage longer visits and higher customer satisfaction.
Niccol stressed that these changes are part of a broader strategy to invest in stores with growth potential while scaling back in areas that underperform.
What’s next
The closures and layoffs are scheduled to be completed before the end of Starbucks’ fiscal year next week. Niccol said the company remains committed to its employees and customers during the transition, providing support for affected staff and focusing on long-term operational improvements.
The company’s actions reflect a growing trend in retail and service sectors, where chains are increasingly optimizing their physical presence and corporate structure to remain competitive amid changing consumer habits.
Starbucks’ restructuring is expected to streamline operations, reduce costs, and position the company for a renewed growth trajectory in North America, while also reinforcing its role as a community hub for coffee lovers.
