Starbucks Store Closures: Two Hundred Fifty Cafes Shutting

Another wave of Starbucks store closures is hitting this week. The coffee giant announced Thursday that it will shut about two hundred fifty coffeehouses across North America, its second major round of cuts under chairman and chief executive Brian Niccol. In a letter to employees, chief operating officer Mike Grams said the targeted locations either cannot deliver the customer experience the company wants or have no path to acceptable financial performance, the Associated Press reported. The closures amount to roughly one in every hundred of the chain's more than eighteen thousand North American coffeehouses.

The money behind the decision is laid out in a filing with the United States Securities and Exchange Commission. Starbucks expects roughly three hundred million dollars in restructuring charges tied to the closures, Restaurant Dive reported. Most of that, about two hundred million dollars, covers cash costs like ending leases and paying employee separation benefits, while the rest reflects write-downs and the disposal of store assets, according to SourceFirst News. The company also trimmed its target for net new stores this fiscal year to around four hundred forty worldwide, down from an earlier goal of six hundred to six hundred fifty, Restaurant Dive reported. For scale, Starbucks runs more than forty-one thousand stores around the world, according to AFP.

This is familiar territory for the chain. Last September, Starbucks closed six hundred twenty-seven stores across North America and Europe and eliminated nine hundred non-retail roles, the Associated Press reported. In May of this year, it laid off three hundred corporate employees and shut several underused offices in the United States. The Wall Street Journal has reported further rounds of corporate cuts, and Storyboard18 reported that more than two hundred employees were dismissed in August after declining to relocate to the company's Nashville office. Niccol, who ran Chipotle before joining Starbucks in September 2024, wants to eliminate two billion dollars in costs by the end of the company's fiscal 2028, according to the Journal.

What this means for baristas

Starbucks said it will move baristas from closing stores to nearby locations where possible and provide severance support to workers it cannot place, the Associated Press reported. Blockonomi reported that roughly nine hundred employees will be affected by the closures. Grams struck a sympathetic note in his letter, writing that some coffeehouses keep underperforming despite the hard work and commitment of the staff, according to the AP.

That sympathy may ring hollow for workers watching this round of Starbucks store closures unfold. More than seven hundred United States stores have voted to unionize since late 2021, and Starbucks Workers United, which represents more than twelve thousand baristas, launched a boycott of the chain in August, Barron's reported. The two sides have yet to reach a labor agreement. It is another sign of how tense things have gotten between service workers and big employers, a dynamic we covered when New York delivery workers won a major settlement (NYC's DoorDash settlement is a big win for dashers).

The bigger bet behind the cuts

The closures sit inside Niccol's "Back to Starbucks" turnaround plan, and the company insists the strategy is working. "Our Back to Starbucks strategy is working," Grams wrote in the employee letter, according to the company's own news blog. Niccol has poured more than five hundred million dollars into staffing and scheduling, Barron's reported, and the company expects to finish renovating fifteen hundred cafes by September 30, the end of its fiscal year. Back in July, Niccol described the portfolio review as "just good hygiene," the Journal reported. Starbucks is also developing a smaller store format to compete with fast-growing rivals like Dutch Bros and leaning into what it calls Green Apron Service, where baristas are encouraged to make small personal gestures like remembering a customer's name, according to AFP.

For customers, the practical effect is simple. Affected stores will point regulars toward nearby locations, and the company says it remains committed to growing in North America. Still, losing your neighborhood coffeehouse stings, especially when Starbucks has spent the past year talking up warmer, more welcoming cafes built for lingering. If your coffee order has ever been part of a job interview debate, you know how seriously people take their caffeine rituals (the iced coffee interview debate). Investors, for their part, took the news in stride: shares slipped less than one percent in Thursday afternoon trading, according to Barron's. Whether the cuts actually fix what is broken, or just shrink the footprint until the numbers look right, should become clear over the next few quarters.

Sources: Associated Press, Restaurant Dive, Barron's, AFP, Storyboard18.