Starbucks to Close Some North American Stores, Lay Off 900 Employees

Starbucks on Thursday announced it would close many of its North American stores in addition to sweeping layoffs.

The closures will target locations where Starbucks has found it is “unable to create the physical environment our customers and partners expect” or where it doesn’t “see a path to financial performance,” according to a statement published by the company.

The company said it was only closing company-operated stores, of which it had 11,453 as of June 29, 2025. While the exact number of stores to be closed remains unclear, the closures will represent about 1% of those stores.

Starbucks ended its 2024 fiscal year with 18,424 open stores in North America, including 7,281 licensed storefronts, which aren’t affected by the announcement. It will end fiscal year 2025 — which ends on September 29 — with 18,300 open stores across the continent, per the company’s announcement.

Starbucks staff in affected stores will be notified of the changes this week, with efforts made to transfer employees in closing stores to open locations nearby, the company said. Where transfers cannot be made, employees will be eligible for severance packages, the company added.

In a statement provided to Business Insider, a spokesperson for Starbucks Workers United, which represents 12,000 baristas across 45 states and Washington, DC, said the union would bargain with the company to ensure those affected are assigned to new stores in accordance with their preferences.

“Fixing what’s broken at Starbucks isn’t possible without centering the people who engage with the company’s customers day in and day out,” the statement said.

According to an SEC filing released Thursday, the restructuring, which was approved by the Starbucks board of directors on Tuesday, will cost the company around $1 billion.

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The filing shows that roughly $150 million in expenses will be related to employee separation benefits, a further $400 million related to the disposal of store assets from closed locations, and about $450 million in costs related to early lease terminations at affected stores.

The company said that, beginning in fiscal year 2026, it will continue to grow the number of coffeehouses it operates and refurbish more than 1,000 existing locations as it continues to invest in the business.

In addition to the store closures, the company announced that about 900 non-retail employees will be laid off on Friday. It also announced it would offer severance packages in addition to benefits extensions to affected employees.

“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,” CEO Brian Niccol said in a statement about the changes.

Thursday’s announcement is the second round of layoffs for Starbucks employees this year. Business Insider previously reported the company laid off 1,100 corporate staffers in February.

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