Today, Starbucks CEO Brian Niccol revealed his company’s $1 billion restructuring plan as part of its ongoing “Back to Starbucks” transformation.
The company’s latest cost-cutting strategy involves shutting down several North American coffee outlets and reducing staff.
In a lengthy press release to investors, Niccol said, “While we’re making good progress, there is much more to do to build a better, stronger, and more resilient Starbucks. As we approach the beginning of our new fiscal year, I’m sharing two decisions we’ve made in support of our Back to Starbucks plan. Both are grounded in putting our resources closest to the customer so we can create great coffeehouses, offer world-class customer service, and grow the business.”
“I shared earlier this year that we were carefully reviewing our North America coffeehouse portfolio through the additional lens of our Back to Starbucks plan… During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed… Since we’ve already opened numerous coffeehouses over the past year, our overall company-operated count in North America will decline by about 1% in fiscal year 2025 after accounting for both openings and closures.”
“Despite the upcoming closures, the CEO says the ultimate goal is to increase the number of North American Starbucks locations in the near future. “We will end the fiscal year with nearly 18,300 total Starbucks locations – company operated and licensed – across the U.S. and Canada. In fiscal year 2026, we’ll grow the number of coffeehouses we operate as we continue to invest in our business. Over the next 12 months, we also plan to uplift more than 1,000 locations to introduce greater texture, warmth, and layered design.”
Niccol stated that approximately 900 non-retail employees will be laid off on Friday.
“I know these decisions impact our partners and their families, and we did not make them lightly. 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,” he concluded.
Starbucks shares fell slightly following the CEO’s announcement.
By CEO NA Editorial Staff
