Starbucks shuttering stores.In a dramatic move signaling the intensity of pressure on large retail and hospitality chains, Starbucks has announced an ambitious restructuring plan that will shutter underperforming stores in Canada and the U.S. while cutting approximately 900 non‐retail roles. The changes come amidst slumping same-store sales, rising costs, and evolving consumer behavior.
For long, Starbucks has been seen as a resilient brand with a loyal customer base yet, even it is not immune to macroeconomic headwinds, internal inefficiencies, and the need for reinvention. This shake-up raises questions about how legacy consumer brands must adapt, the human cost of restructuring, and what it means for employees, communities, and Starbucks’ future trajectory.
Starbucks shuttering stores, laying off 900 workers in Canada and U.S.- Overview
| Article on | Starbucks shuttering stores, laying off 900 workers in Canada and U.S. |
| Store Closures | Hundreds of underperforming locations in the U.S. and Canada will be shut down. |
| Job Cuts | About 900 non-retail roles are eliminated; some store staff may be reassigned. |
| Cost of Restructuring | Estimated US$1 billion including severance and lease exits. |
| Reason | Declining sales, rising costs, and need for operational reset. |
| Future Focus | Leaner footprint, redesigned stores, and improved customer experience. |
What Exactly Is Happening: The Scope of Closures and Layoffs
- As part of a US$1 billion restructuring effort, Starbucks will close a portion of its stores and eliminate around 900 non-retail (corporate or support) positions.
- The company did not immediately specify the exact number of stores to be shut, but several outlets and analysts estimate closures in the hundreds, possibly in the ballpark of 400 in North America.
- Starbucks expects its North American footprint to decline by around 1 % by the end of fiscal 2025, after accounting for both closures and new store openings.
- Employees in stores marked for closure may be offered transfers to neighboring locations, where possible, or severance packages.
- The cost breakdown of the restructuring includes approximately US$150 million for severance and US$850 million in expenses related to closing stores, exiting leases, and disposing of assets.
Why Starbucks Is Doing This: Pressures, Failures, and Strategic Reset
1. Declining Sales & Customer Sensitivity
Starbucks has been battling six consecutive quarters of negative same-store sales growth in the U.S., reflecting both weakening demand and consumer price sensitivity. Consumers facing inflation and cost pressures are cutting back on discretionary spending, which includes premium coffee runs.
2. Underperforming Locations & Store Saturation
In its internal review, Starbucks identified stores that “don’t meet performance or experience standards” or where “we don’t see a path to financial performance.” Some locations, perhaps burdened by high rent, low foot traffic, or inability to be upgraded to the desired store experience, were judged unsustainable.
3. Failed Cost-Cutting Experiments and Shifts in Strategy
Earlier, Starbucks had leaned into automation (e.g. the Siren Craft System) and reduced staffing in some stores—but these moves reportedly backfired, harming customer satisfaction and weakening service. Under the new leadership of CEO Brian Niccol (who joined in 2024), Starbucks has signaled a course correction: more human staffing, curated store experience, and operational discipline.
4. Cost Overhead, Real Estate, and Lease Burdens
Some of the stores being closed are likely those with high fixed costs, unfavorable leases, or properties that cannot be retrofitted to Starbucks’ updated design standards. Exiting leases, disposing of assets, and lease obligations contribute heavily to the overall $1 billion cost.
5. Organizational Bloat & Redundancy
The layoffs target non-retail roles—support, corporate functions, open roles not filled, or overlapping positions. Starbucks already cut over 1,100 corporate jobs earlier in 2025. The company is reducing layers, eliminating redundancies, and sharpening accountability.
6. Unionization Dynamics and Cost Pressures
Since 2021, Starbucks has faced a wave of unionization efforts at many U.S. stores via Starbucks Workers United. While Starbucks insists that store closures were not tied to union status, the timing and selection of which locations close will face scrutiny from labor advocates.
Looking Forward: What It Might Mean for Starbucks
This restructuring is a hinge point for Starbucks. If done well, it could mark the transition from sprawling ubiquity to a more disciplined, high-performing brand—less about everywhere, more about where it counts. The idea is not just to shrink, but to refocus and reinvest in stores that deliver strong customer value and profitability.
However, risks abound: missed execution, drained morale, and loss of customer trust can derail the plan. Whether Starbucks emerges stronger or stumbles will depend heavily on how adeptly it navigates this transition, keeps customers engaged, and aligns its workforce to a more selective, efficient vision.
Final Thoughts
Starbucks’ decision to shutter stores and lay off 900 workers across Canada and the U.S. marks one of the company’s most significant resets in recent history. While the move highlights the reality that even global brands are not shielded from consumer shifts, economic headwinds, and operational missteps, it also underscores Starbucks’ willingness to confront hard truths and adapt.
FAQs for Starbucks shuttering stores, laying off 900 workers in Canada and U.S.
About 900
To cut costs and shut underperforming locations.
No, only select stores in Canada and the U.S.
Severance pay or transfers to nearby stores.
Roughly US$1 billion.