Starbucks is making major cuts as part of its turnaround plan.
CEO Brian Niccol told employees Thursday that the company will close underperforming stores, eliminate 900 non-retail jobs, and freeze many open positions. He said the move follows a review of Starbucks’ North America portfolio that found certain locations couldn’t deliver the customer and employee experience the company expects—or lacked a clear path to profitability.
Niccol admitted that Starbucks regularly opens and closes stores each year, but he called this “a more significant action” than usual. Employees at affected stores will be notified this week, and those whose jobs are cut will be informed Friday.
Despite the closures, Niccol emphasized that Starbucks is still growing. The company’s store count in North America will only decline by about 1% this fiscal year, leaving nearly 18,300 locations. By 2026, Starbucks expects to grow again, with more than 1,000 locations slated for redesigns featuring updated interiors, mugs instead of paper cups, and hand-written names on drinks.
Niccol, who took over just a year ago as the company’s third CEO in two years, said Starbucks is “ahead of schedule” in its turnaround but still faces challenges. Unionization drives, declining traffic, and cautious consumer spending remain hurdles.
The turnaround strategy zeroes in on efficiency—shorter wait times, better staffing during peak hours, streamlined mobile orders, and customers handling their own condiments. Starbucks aims to have all drinks ready in four minutes or less.
Niccol said early results from refreshed stores are promising. “Customers are visiting more often, staying longer, and sharing positive feedback,” he told employees.