What's happened
On September 25, 2025, Starbucks announced layoffs of approximately 900 staff and the closure of about 1% of its North American stores, including its flagship Seattle roastery. CEO Brian Niccol aims to restore the coffeehouse experience amid six quarters of declining US sales. The cuts mainly affect support and corporate roles, while the company plans to invest in store improvements and technology.
What's behind the headline?
Strategic Restructuring Amid Declining Sales
Starbucks' decision to cut 900 jobs and close around 100 stores in North America reflects a significant restructuring effort under CEO Brian Niccol. This move is a direct response to sustained sales declines and operational challenges, including long wait times and staffing issues.
Focus on Core Coffeehouse Experience
Niccol's strategy emphasizes restoring the traditional coffeehouse atmosphere, investing in store design, and improving service efficiency through technology. The closures target locations that fail to meet financial or experiential benchmarks, signaling a shift towards quality over quantity.
Labor Relations and Union Tensions
The closures include unionized stores, notably the Seattle flagship and a Chicago location, exacerbating tensions with Starbucks Workers United. While the company denies union status influenced closures, the union views the cuts as undermining worker efforts and has threatened further strikes.
CEO Compensation and Public Perception
Niccol's $95.8 million compensation package, vastly exceeding average barista pay, contrasts sharply with the layoffs, potentially fueling criticism about corporate priorities.
Outlook and Industry Context
Starbucks faces stiff competition from emerging brands and changing consumer preferences. Niccol's prior success at Chipotle provides investor confidence, but the scale and complexity of Starbucks' global operations make rapid turnaround challenging. The company’s plan to close underperforming stores while opening new ones in the UK and EMEA suggests a strategic rebalancing rather than contraction.
Impact on Consumers and Employees
Customers may experience fewer store options but potentially improved service and ambiance at remaining locations. Affected employees face job losses or transfers, with severance and support packages offered. The restructuring will likely continue to shape Starbucks' operational and labor landscape in the near term.
What the papers say
Michael Sainato of The Guardian highlights the scale of layoffs and store closures, noting the impact on 900 non-retail staff and the closure of unionized flagship stores, with the union criticizing the move as a setback for workers. The Guardian quotes CEO Brian Niccol acknowledging the difficulty but necessity of the cuts to build a "better, stronger, and more resilient Starbucks."
The Independent's Henry Saker-Clark provides insight into the UK context, reporting on a consultation over UK store closures without disclosing specifics, while emphasizing Starbucks' commitment to opening new stores. The Independent also details Niccol's earlier layoffs and the company's rationale for closures based on financial performance and customer experience.
Business Insider UK’s Katherine Tangalakis-Lippert offers a broader view of Niccol's turnaround strategy, including menu cuts and operational improvements, but notes sluggish stock performance and the challenges of rapid change at Starbucks' scale.
AP News reports on Niccol's letter to employees, emphasizing the rarity of store count reduction and the company's plans to offer severance and support, framing the restructuring as a significant but necessary action.
The New York Post and Al Jazeera provide complementary details on store counts, layoffs, and Niccol's focus on improving service times and the coffeehouse environment, with Al Jazeera noting the union's ongoing disputes and strikes.
Together, these sources paint a comprehensive picture of Starbucks' restructuring as a complex, multifaceted effort to stabilize and revitalize the brand amid economic pressures and labor challenges.
How we got here
Starbucks has faced six consecutive quarters of declining US sales due to rising inflation and increased competition. Since Brian Niccol became CEO in September 2024, he has implemented cost-cutting measures including a 30% menu reduction, corporate layoffs, and store portfolio reviews to improve financial performance and customer experience.
Go deeper
- How will the store closures affect Starbucks customers?
- What is the impact of layoffs on Starbucks employees and unions?
- What are Brian Niccol's plans to turn Starbucks around?
Common question
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Why Is Starbucks Closing Some UK Stores?
Starbucks is currently closing some of its UK stores as part of a global review of its network. This move has raised questions about the reasons behind these closures, how many jobs might be affected, and what it means for coffee lovers in the UK. In this article, we explore the factors driving these changes and what they mean for consumers and staff alike.
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Are Coffee Chains Closing Stores Worldwide?
Many coffee lovers and industry watchers are noticing store closures across major brands. But is this a local issue or part of a global trend? What’s driving these closures, and how are coffee companies adapting to changing consumer habits? In this page, we explore the latest developments in the global coffee industry, focusing on store closures, strategic shifts, and what it means for coffee fans everywhere.
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Will Starbucks Reopen Closed UK Stores?
Starbucks is currently reviewing its UK store network, with some locations set to close amid performance concerns. Many coffee lovers are wondering if their favorite Starbucks will reopen or if new stores will replace those shutting down. Below, we explore what’s next for Starbucks in the UK, how consumers are reacting, and what alternatives are available.
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