Starbucks Announces $1 Billion Restructuring: Hundreds of Starbucks Store Closures and Mass Layoffs

Liputan6.com, Jakarta Starbucks, the global coffee giant, recently announced an ambitious $1 billion restructuring plan that will be implemented through September 2025.

As reported by CNN, Starbucks is taking these actions to turn around its struggling business, closing a large number of cafes and announcing a second wave of layoffs at its headquarters as part of CEO Brian Niccol's efforts to revive the struggling coffee chain.

This strategic move includes hundreds of store closures and staff reductions, primarily in North America.

This drastic decision comes in response to six consecutive quarters of declining sales in the United States and marks a major effort to turn the company around.

Coffee giant Starbucks will lay off workers and close stores as part of a $1 billion restructuring plan, CEO Brian Niccol said in a memo to employees Thursday.Read more: https://t.co/GSXekP9Vh0 pic.twitter.com/5SR5Gzp3p9

— ABC News (@ABC) September 25, 2025

As part of this restructuring, Starbucks will implement significant store closures, targeting hundreds of stores in the United States, Canada, and Europe.

Niccol announced Thursday that Starbucks will close hundreds of stores this month, or about 1% of its total.

The company had 18,734 stores in North America at the end of June, and the company said it plans to close 18,300 stores by September.

This reduction is expected to equate to the closure of approximately 400 to 500 company-operated stores in the region, despite new store openings.

In a letter to employees, Niccol said the company underwent a review of its footprint and the locations that will close were ones “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”

“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,” he said.

In addition to Starbucks store closures, this restructuring also includes significant employee reductions.

Starbucks will lay off approximately 900 employees working in non-retail positions.

These reductions also involve the elimination of many previously open or vacant positions across various departments.

These layoffs will primarily affect roles in support teams and corporate staff functions, not baristas or store operations staff.

This is Starbucks' second round of layoffs this year, following the elimination of 1,100 corporate positions in February 2025.

“I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol wrote.

“I believe these steps are necessary to build a better, stronger and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers and the communities we serve.”

As of September 2024, Starbucks had approximately 10,000 non-coffeehouse employees in the US.

Starbucks' restructuring plan is estimated to cost approximately $1 billion, with approximately 90% of that amount allocated to its North American operations.

The cost breakdown includes approximately $150 million for employee severance and $850 million related to Starbucks store closures.

This $850 million figure is further divided into $400 million for store asset write-offs and $450 million for rent due to early store closures.

This restructuring is part of the "Back to Starbucks" strategy led by CEO Brian Niccol, who took over in August 2024.

This strategy is designed to address six consecutive quarters of declining sales in the US, as consumers become more discerning due to inflation and intense competition.

Niccol aims to restore the "coffee shop" feel by redesigning interiors, serving drinks in cups, and handwriting customers' names.

The company plans to "elevate" more than 1,000 store locations in the next 12 months with improved interior design.

By March 2025, Starbucks will also remove 30% of beverage and food items from its menu to make room for new products and reduce wait times.