Starbucks to Close 250 North American Stores in Second Wave of Shutterings
- Starbucks plans to close 250 North American stores as part of its second major round of closures under Chairman and Chief Executive Brian Niccol.
- Starbucks Chief Operating Officer Mike Grams outlined the strategy in a letter to employees, noting that the affected coffeehouses continue to underperform despite ongoing staff efforts.
- The restructuring follows a larger wave of closures last September, when Starbucks shut down 627 stores across North America and Europe alongside 900 non-retail layoffs.
Starbucks plans to close 250 North American stores as part of its second major round of closures under Chairman and Chief Executive Brian Niccol. The closures, which take effect later this week, target locations that are either failing to deliver acceptable financial results or cannot provide the intended customer and employee experience.
Brian Niccol Orders Second Major Wave of North American Closures
Starbucks Chief Operating Officer Mike Grams outlined the strategy in a letter to employees, noting that the affected coffeehouses continue to underperform despite ongoing staff efforts. The company did not specify Thursday which exact locations will close or how many are situated in the United States, though local reporting indicates closures across California, including two in Fresno, one in Merced, three in San Luis Obispo, five in Sacramento, and one in Gilroy.
Millions in Restructuring Costs Follow Earlier Corporate Cuts
The restructuring follows a larger wave of closures last September, when Starbucks shut down 627 stores across North America and Europe alongside 900 non-retail layoffs. In May, the company cut an additional 300 corporate jobs and closed underused United States offices.
For the upcoming closures, Starbucks expects to incur $300 million in restructuring charges, consisting of $200 million in cash expenses for lease exits and severance benefits, and $100 million in non-cash charges tied to asset disposal.
Unionized Locations Affected as Labor Friction Persists
Starbucks Workers United, which represents employees at roughly 700 company-owned unionized U.S. stores, stated that 20 unionized locations are included in the 250 closures, representing about 8% of the total. Union representatives announced plans to send a formal request for information to the company and engage in bargaining at every affected unionized store. Starbucks and the union have not yet reached a collective bargaining agreement since store unionization efforts began in late 2021.
Broader Footprint Expansion and Retrofit Plans Continue
Company leadership maintains that the overall store footprint in North America will continue to grow despite the cuts. At the close of June, Starbucks operated 18,371 stores in the region. Grams stated that the company is pressing forward with retrofitting coffeehouses to create cozier environments, with 1,500 stores scheduled for updates by Sept. 30, the end of the fiscal year.
Starbucks reported that employees affected by the closures will be transferred to other stores where possible, or provided with severance support if relocation is not feasible. Starbucks shares fell less than 1% in afternoon trading Thursday following the announcement.