Starbucks CEO Brian Niccol told employees in a memo Thursday that the company will eliminate 900 non-retail jobs and shut down locations that no longer meet its financial or design goals. When the changes are complete, the coffee chain’s store count in the U.S. and Canada will fall by about 1%, ending the fiscal year with roughly 18,300 locations.
“While we’re making good progress, there is much more to do to build a better, stronger, and more resilient Starbucks,” Niccol said.
The decision follows six straight quarters of declining same-store sales, as inflation-weary customers pull back on discretionary spending. Starbucks shares ticked slightly higher in early trading after the announcement.
The closures will target underperforming cafes, particularly those in areas where upgrades are no longer feasible or traffic has shifted. “Our coffeehouses are centers of the community, and closing any location is difficult,” Niccol added.
The company said it will attempt to relocate affected store employees where possible. Corporate staff losing their roles will receive severance packages.
Store openings will continue in other markets, meaning the net reduction is modest. Still, the cuts mark one of Starbucks’ largest non-retail workforce reductions in recent years — and reflect growing pressure to balance investment with profitability.
The restructuring comes as Starbucks attempts to reset operations and restore momentum. The company has been updating interiors, adjusting menus, and rolling out new digital features to bring customers back in. But Thursday’s move underscores the challenge of pulling off a turnaround in a tougher economic climate — even for a brand as iconic as Starbucks.