Starbucks to Shut Down Hundreds of Stores, Lay Off Staff in $1 Billion Restructuring Plan

Starbucks has approved a sweeping $1 billion restructuring plan aimed at turning around its struggling business. The move will see hundreds of stores closed across North America and about 900 employees laid off, as the coffee giant seeks to revive sales and reduce costs.

Hundreds of Starbucks Stores to Close in September

Under the plan, Starbucks will permanently close hundreds of outlets, representing around 1% of its North American locations. The company had 18,734 stores as of June 2025 but expects that number to fall to about 18,300 by the end of September, according to reports.

In a letter to employees, CEO Brian Niccol said the stores chosen for closure were those unable to meet customer expectations or deliver financial performance.

Job Cuts and Support for Employees

Along with the closures, around 900 Starbucks employees will lose their jobs this month. The layoffs mark the company’s second round of job cuts this year, following the reduction of about 1,000 staff in February.

Affected employees will be notified by Friday and will receive severance pay and support packages. Starbucks also confirmed that several open positions across its operations will be closed.

Why Is Starbucks Struggling?

The restructuring comes at a time when Starbucks is facing multiple challenges:

Weak U.S. demand: Consumers are cutting back on premium-priced coffee drinks amid economic pressure.

China slowdown: The company is reportedly exploring a stake sale in its China business, which is struggling with rising competition and soft demand.

Rising costs: High operational expenses have added pressure to Starbucks’ margins, prompting the company to streamline operations.

The restructuring is designed to help Starbucks stabilize its financial performance and rebuild growth momentum. While closures and layoffs are painful in the short term, the company hopes that streamlining operations will allow it to focus on profitable markets, innovate new products, and improve customer experience.

FAQs on Starbucks Restructuring

Q1: Why is Starbucks closing stores in 2025?

Starbucks is shutting down underperforming stores as part of a $1 billion restructuring plan to reduce costs and revive profits.

Q2: How many Starbucks stores are closing this year?

The company will permanently close hundreds of outlets, reducing its North American footprint from 18,734 to around 18,300 stores.

Q3: How many Starbucks employees are being laid off?

About 900 employees will lose their jobs this month, in addition to 1,000 layoffs earlier in February 2025.

Q4: Will Starbucks exit the China market?

Starbucks is not exiting China but is reportedly exploring a stake sale in its China business due to weak demand and strong competition.

Q5: What support will affected Starbucks employees receive?

Laid-off staff will be provided with generous severance packages and support programs, according to CEO Brian Niccol.