Starbucks is set to close underperforming stores and reduce corporate staff as CEO Brian Niccol moves forward with a broader plan to reshape and revitalize the coffee giant.
In a letter posted to Starbucks’ blog and shared with employees on Thursday, Niccol outlined plans to cut 900 non-retail roles and freeze open positions as part of a $1 billion restructuring effort. The memo said employees will be notified on Sept. 26 and will receive “severance and support packages including benefits extensions.”
“We will continue to carefully manage costs and stay focused on the key areas that drive long-term growth,” Niccol wrote.
The announcement follows earlier layoffs of 1,100 employees earlier this year. Niccol said the company intends to redirect the savings into its stores by hiring additional customer service staff, as well as investing in updated coffeehouse designs and other innovations.
Niccol also announced in July that corporate employees, including support partners and people managers, will be required to work from the office four days a week starting Sept. 29.
In its latest quarterly results, Starbucks reported its sixth consecutive decline in U.S. same-store sales. Sales fell 2%, matching the previous quarter’s drop but coming in above Wall Street forecasts of a 2.5% decline. The decrease was driven by a 4% drop in comparable transactions, less severe than analysts’ expectations of a 4.5% decline.
The company now plans to shrink its store count by about 1% in the U.S. and Canada this fiscal year, accounting for both closures and new openings. By the end of the year, the total number of company-operated and licensed stores in North America is expected to reach nearly 18,300, down from 18,842 locations reported in Q3.
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“We identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed,” Niccol wrote.
Starbucks said it will invest in 1,000 locations over the next year to enhance the traditional coffeehouse experience, shifting focus away from pick-up-oriented service.
In a July call with investors, Niccol said Starbucks plans to carry out small, targeted renovations at its stores, investing roughly $150,000 per location to restore the thousands of chairs that had been removed.
For new stores, Niccol said Starbucks has reduced construction costs by about 30% and plans to roll out a new stand-alone prototype in fiscal 2026 featuring 32 seats and a drive-through.
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In 2025, a number of major companies across different industries have announced significant layoffs, pointing to economic pressures, restructuring, and the adoption of new technologies as key reasons.
Oracle has cut jobs as part of efforts to streamline operations and expand its use of artificial intelligence. Nike has also reduced staff to adjust to shifting market conditions and improve efficiency. Big tech names like Meta, Microsoft, Intel, and Salesforce have all made similar moves, citing AI integration, performance-driven reorganizations, and cost-cutting measures. In the energy sector, giants such as Chevron, BP, and ConocoPhillips are trimming their workforces to keep pace with changing market demands and sustainability initiatives.
Overall, these layoffs highlight a broader trend of companies across sectors making tough decisions to adapt to economic challenges and technological change.