Starbucks is undergoing one of its most dramatic shakeups in recent years, with CEO Brian Niccol announcing hundreds of store closures and a new wave of layoffs as part of a billion-dollar restructuring effort. The company, which has long positioned itself as a community staple, is now facing the reality of slowing sales, mounting competition, and rising costs. While Starbucks remains a household name with nearly 19,000 North American cafés, its footprint is about to shrink as Niccol doubles down on efficiency and profitability.
The move is part of a strategy Niccol has been developing since he became CEO just over a year ago. Despite tweaks to the menu, redesigned stores, and efforts to modernize the customer experience, Starbucks has struggled to deliver the turnaround Wall Street expected. With shares down roughly 12% over the past year, the company is signaling that more drastic measures are necessary to restore long-term growth.Hundreds of store closures plannedStarbucks confirmed it will close hundreds of cafés this month, representing about 1% of its total locations in North America. By the end of September, the company expects to operate 18,300 stores, down from 18,734 just a few months earlier.CEO Brian Niccol explained in a letter to employees that the closures are the result of an in-depth review of the company’s footprint. The stores slated to close were locations “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”While Starbucks has always closed underperforming locations on a smaller scale, this round of cuts is described as a “more significant action” aimed at stabilizing the business. Niccol acknowledged the closures will affect both employees and customers, noting the company does not take the decision lightly.Layoffs hit headquarters staffAlongside the closures, Starbucks announced it will cut an additional 900 corporate jobs, following roughly 1,000 layoffs that took place in February. The move underscores the company’s attempt to streamline operations at the highest levels while cutting costs.Employees impacted by the layoffs will be notified immediately and offered severance and support packages. Niccol also confirmed that “many” open roles at headquarters will remain unfilled.“I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol wrote. “But I believe these steps are necessary to build a stronger and more resilient Starbucks that continues to create opportunities for the communities we serve.”A $1 billion restructuring effortThe restructuring plan is expected to cost Starbucks around $1 billion, reflecting the scale of the changes. Despite the closures and job losses, the company insists this is not a retreat but rather a reset.Starbucks plans to remodel more than 1,000 locations across North America, refreshing their look with warmer colors, cozier seating, and more power outlets to attract modern customers who use cafés as workspaces. These updates are part of an effort to revitalize the in-store experience while appealing to both casual and loyal customers.Menu changes and customer experience upgradesOver the past year, Niccol has made several adjustments to Starbucks’ menu and store offerings in an attempt to modernize the brand. He reduced the menu by about 30% to streamline operations, while introducing trendy new items such as protein toppings, coconut water beverages, and updated croissants and baked goods.The company has also reintroduced self-serve milk and sugar stations and added small touches such as doodles on coffee cups. In a symbolic move, Starbucks tweaked its name back to “Starbucks Coffee Company” to reinforce its identity as a coffee-first brand.These changes, however, have not been without controversy. Some baristas have raised concerns about complicated new drinks that are difficult to make during busy periods, while a uniform change sparked a lawsuit.One year into Niccol’s leadershipBrian Niccol took the reins at Starbucks just over a year ago, promising to restore growth to one of the world’s most recognized coffee chains. His first year has been a mix of bold moves and stubborn challenges. While he has made efforts to simplify the menu and enhance customer experience, the company’s financial results have not yet delivered the rebound that investors hoped for.Starbucks stock is down around 12% over the past year, and same-store sales have struggled to gain momentum. With competitors expanding rapidly and consumer spending under pressure, Starbucks faces a critical period where its reinvention must yield results.The road ahead for StarbucksDespite the closures and layoffs, Starbucks insists it will return to growth mode in the coming year. By remodeling existing cafés, investing in customer-friendly upgrades, and focusing on its core coffee business, the company hopes to reestablish its leadership in the global coffee market.Still, challenges remain. Balancing efficiency with the customer experience, managing labor relations, and keeping up with changing consumer tastes will all be crucial for Starbucks as it enters this new phase. For Niccol, the next year may prove decisive in determining whether his bold strategy can revive the iconic brand.
The move is part of a strategy Niccol has been developing since he became CEO just over a year ago. Despite tweaks to the menu, redesigned stores, and efforts to modernize the customer experience, Starbucks has struggled to deliver the turnaround Wall Street expected. With shares down roughly 12% over the past year, the company is signaling that more drastic measures are necessary to restore long-term growth.Hundreds of store closures plannedStarbucks confirmed it will close hundreds of cafés this month, representing about 1% of its total locations in North America. By the end of September, the company expects to operate 18,300 stores, down from 18,734 just a few months earlier.CEO Brian Niccol explained in a letter to employees that the closures are the result of an in-depth review of the company’s footprint. The stores slated to close were locations “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”While Starbucks has always closed underperforming locations on a smaller scale, this round of cuts is described as a “more significant action” aimed at stabilizing the business. Niccol acknowledged the closures will affect both employees and customers, noting the company does not take the decision lightly.Layoffs hit headquarters staffAlongside the closures, Starbucks announced it will cut an additional 900 corporate jobs, following roughly 1,000 layoffs that took place in February. The move underscores the company’s attempt to streamline operations at the highest levels while cutting costs.Employees impacted by the layoffs will be notified immediately and offered severance and support packages. Niccol also confirmed that “many” open roles at headquarters will remain unfilled.“I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol wrote. “But I believe these steps are necessary to build a stronger and more resilient Starbucks that continues to create opportunities for the communities we serve.”A $1 billion restructuring effortThe restructuring plan is expected to cost Starbucks around $1 billion, reflecting the scale of the changes. Despite the closures and job losses, the company insists this is not a retreat but rather a reset.Starbucks plans to remodel more than 1,000 locations across North America, refreshing their look with warmer colors, cozier seating, and more power outlets to attract modern customers who use cafés as workspaces. These updates are part of an effort to revitalize the in-store experience while appealing to both casual and loyal customers.Menu changes and customer experience upgradesOver the past year, Niccol has made several adjustments to Starbucks’ menu and store offerings in an attempt to modernize the brand. He reduced the menu by about 30% to streamline operations, while introducing trendy new items such as protein toppings, coconut water beverages, and updated croissants and baked goods.The company has also reintroduced self-serve milk and sugar stations and added small touches such as doodles on coffee cups. In a symbolic move, Starbucks tweaked its name back to “Starbucks Coffee Company” to reinforce its identity as a coffee-first brand.These changes, however, have not been without controversy. Some baristas have raised concerns about complicated new drinks that are difficult to make during busy periods, while a uniform change sparked a lawsuit.One year into Niccol’s leadershipBrian Niccol took the reins at Starbucks just over a year ago, promising to restore growth to one of the world’s most recognized coffee chains. His first year has been a mix of bold moves and stubborn challenges. While he has made efforts to simplify the menu and enhance customer experience, the company’s financial results have not yet delivered the rebound that investors hoped for.Starbucks stock is down around 12% over the past year, and same-store sales have struggled to gain momentum. With competitors expanding rapidly and consumer spending under pressure, Starbucks faces a critical period where its reinvention must yield results.The road ahead for StarbucksDespite the closures and layoffs, Starbucks insists it will return to growth mode in the coming year. By remodeling existing cafés, investing in customer-friendly upgrades, and focusing on its core coffee business, the company hopes to reestablish its leadership in the global coffee market.Still, challenges remain. Balancing efficiency with the customer experience, managing labor relations, and keeping up with changing consumer tastes will all be crucial for Starbucks as it enters this new phase. For Niccol, the next year may prove decisive in determining whether his bold strategy can revive the iconic brand.
