&imwidth=800&imheight=600&format=webp&quality=medium "Layoffs & store closure: Starbucks is changing more than just its menu—Here’s what’s coming next for coffee giant")
Starbucks is taking drastic steps to revive its business, including closing a significant number of its stores and reducing its workforce, as CEO Brian Niccol works to reverse the company’s downturn. Announced on Thursday (September 25), the closures will affect around 1% of Starbucks locations in North America. With approximately 18,734 locations as of June, Starbucks will shrink to 18,300 by the end of September across the USA and Canada.
The restructuring will cost an estimated $1 billion, though Starbucks stock remained steady in early trading. In a letter to employees, Niccol explained that the company had evaluated its stores and determined that many closures were necessary where locations failed to meet customer or financial expectations. "This decision is part of a larger initiative to refocus the company," he said.
While the closures will have a broad impact, Starbucks also intends to remodel more than 1,000 of its remaining locations, bringing in designs featuring cozier seating, more power outlets, and warmer color schemes to enhance the customer experience. In addition to the store closures, Niccol revealed that Starbucks would lay off 900 corporate staff members, building on the previous round of 1,000 layoffs earlier this year. Affected employees will receive severance packages, and open positions will be closed. "These decisions are tough but necessary to build a more resilient Starbucks," Niccol wrote, recognising the personal impact on employees.
Starbucks shares plunge massively
The company’s struggles have been ongoing since Niccol’s arrival a year ago. Despite efforts to streamline the menu, introduce new products like protein toppings, and update its food offerings, Starbucks has seen little improvement. The company’s stock has dropped by about 12% over the past year, and sales have not recovered as expected.
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In addition to the structural changes, Starbucks has made several adjustments to improve daily operations. The brand brought back self-serve milk and sugar stations, redesigned coffee cup doodles, and rebranded as "Starbucks Coffee Company" to emphasise its core identity. However, some of these changes have sparked backlash, including complaints from baristas about new uniforms and more complicated drinks during peak hours.
