Starbucks has announced a major restructuring plan that involves closing some of its North American coffeehouses and laying off more workers as part of its ongoing transformation under CEO Brian Niccol. The company plans to close around 1% of its North American locations by the end of the fiscal year, amounting to approximately 100 cafes shutting their doors. Additionally, Starbucks anticipates cutting about 900 non-retail jobs in line with its efforts to reallocate resources and focus on customer-centric strategies.
The restructuring process is estimated to cost the company $1 billion, with the majority of expenses attributed to North American operations. Starbucks aims to end the fiscal year with nearly 18,300 total locations in the U.S. and Canada, both company-operated and licensed. Despite the closures and layoffs, the coffee giant plans to resume its growth trajectory in the following fiscal year.
The decision to close specific locations comes after a thorough review of the company's portfolio to ensure that each coffeehouse aligns with the desired customer experience and financial performance goals. While Starbucks regularly opens and closes stores for various reasons, including underperformance, this round of closures is deemed more substantial. The company emphasizes that partners affected by the closures will receive support, including transfers to nearby locations or comprehensive severance packages.
This restructuring initiative aligns with Starbucks' broader strategy to enhance the customer experience, revitalize stores, and drive long-term growth. By investing in store upgrades and operational improvements, Starbucks aims to attract more customers, boost sales, and foster a more engaging environment in its coffeehouses. The company's efforts to prioritize customer satisfaction and operational efficiency have already yielded positive feedback and improved performance metrics.
Brian Niccol, who took the helm as CEO in 2024, has been spearheading Starbucks' turnaround efforts, aiming to position the company as a leader in customer service and experience. With a focus on strategic cost management, operational excellence, and continuous innovation, Starbucks is working towards building a stronger and more resilient brand that resonates with customers, partners, and communities.
While these restructuring measures may have a short-term impact on Starbucks' workforce and operations, the company believes that these steps are crucial for its long-term success and sustainability. Niccol's leadership and vision for Starbucks reflect a commitment to driving positive change, adapting to market dynamics, and reinforcing the company's position as a premier coffee chain in a competitive industry landscape.