☕ Starbucks’ Bold Move: Closing Stores and Laying Off Staff to Revamp the Brand
Starbucks, the iconic global coffee chain, is currently undertaking a significant restructuring effort that involves closing hundreds of stores and laying off approximately 900 employees across North America. This sweeping initiative, announced in September 2025 as part of CEO Brian Niccol’s “Back to Starbucks” strategy, aims to address the company’s recent decline in sales and improve its long-term profitability. The store closures represent about 1% of Starbucks’ total U.S. and Canadian outlet count, with the company anticipating to operate around 18,300 stores by the end of its 2025 fiscal year, down from approximately 18,734 earlier in the year.
The main reasons behind why Starbucks is closing stores include underperformance at certain locations and the inability to provide the physical environment that meets customers’ expectations. CEO Niccol emphasized that these tough decisions follow a thorough evaluation of the company’s footprint, targeting sites that lack a viable path to financial success or fail to establish the desired atmosphere for both customers and staff. This restructuring effort is larger in scale than previous store consolidations and reflects a broader challenge for Starbucks amid increased competition and changing consumer preferences in the business landscape.
Starbucks is focusing resources on revitalizing its core stores rather than expanding indiscriminately. The plan also includes refurbishing over 1,000 Starbucks locations with improvements aimed at creating warmer, more inviting spaces featuring cozier seating and better amenities. The closures and layoffs are part of a $1 billion restructuring cost, primarily impacting North America, with around $150 million expected in employee separation costs and the remainder largely related to lease terminations and asset write-downs.
For workers at shuttered stores, Starbucks is offering transfer options to nearby locations where feasible, along with generous severance and support packages for those not relocating. The 900 layoffs predominantly affect non-retail and corporate roles, following previous job cuts earlier in the year, to streamline operations and focus on key growth areas in the business.
A real-life example that reflects the impact of these closures is the planned shutdown of Starbucks’ Reserve Roastery locations in Seattle’s Capitol Hill and Sodo districts. These flagship sites are among the underperforming stores targeted for closure despite their significance to the brand’s premium product offerings. This move has sparked concern among employees and union representatives, who argue the decisions are being made without adequate input from baristas and frontline staff.
Overall, Starbucks’ store closures in 2025 signal a strategic pivot as the chain recalibrates its approach in a fiercely competitive and evolving market. The aim is to become more efficient and customer-centric, focusing on creating better in-store experiences and stabilizing sales growth amid persistent pressures on consumer spending.
📋 Frequently Asked Questions (FAQs)
Why is Starbucks closing stores in 2025?
Starbucks is closing stores mainly due to underperformance and the inability to provide a physical environment that meets customer expectations. The closures are part of a larger restructuring plan focused on improving profitability and store experience.
What areas are affected by Starbucks store closures 2025?
The closures primarily affect Starbucks locations across the United States and Canada. Specific underperforming sites, including some notable locations like the Seattle Reserve Roasteries, are scheduled to close.
How many Starbucks locations are closing in 2025?
Starbucks plans to close about 1% of its stores in North America, which translates to roughly 200 to 430 locations being shuttered by the end of 2025.
What does Starbucks closing locations mean for workers?
Employees at closing stores will be notified and offered transfers to nearby Starbucks stores where possible. Those who cannot be relocated will receive severance and support packages.
What are the reasons behind Starbucks layoffs and store closures?
The layoffs and store closures are part of Starbucks’ $1 billion restructuring to cut costs, focus on core store growth, and improve financial performance amid several quarters of declining same-store sales.
This comprehensive restructuring reflects Starbucks’ effort to evolve its business model and remain competitive while addressing challenges in its largest market. The company remains committed to delivering quality experiences and regaining customer loyalty in the near future.