Starbucks Closes Hundreds of Locations: What the $1 Billion Restructuring Means for Coffee Lovers

Starbucks is closing hundreds of stores across the United States in a major restructuring move announced in late September 2025, impacting thousands of workers and communities nationwide.

Starbucks Store Closures: Key Facts

• Starbucks is shutting down approximately 1% of its stores in the U.S. and Canada, with the total number of locations dropping from 18,734 at the end of June 2025 to about 18,300 by the end of the fiscal year.

• The closures come as part of a $1 billion restructuring plan, which includes job cuts affecting around 900 non-retail, corporate roles.

• The company has not publicly disclosed all the specific locations, but several hundred stores, including iconic outlets, will be shuttered.

Reasons Behind Starbucks Store Closures

Starbucks’ decision to close stores is fueled by several key factors:

• Underperformance: Many of the affected stores failed to meet financial goals or provide the environment Starbucks customers and staff expect.

• Changing Consumer Habits: The company faces declining same-store sales, with six consecutive quarters of decreased traffic as consumers seek either cheaper coffee options or premium experiences elsewhere.

• Cost Management: CEO Brian Niccol’s “Back to Starbucks” strategy aims to streamline the company, redirect investment, and manage operational costs while focusing on locations with long-term growth potential.

Impact on Starbucks Workers and Communities

The closures and layoffs will have significant consequences for Starbucks employees and local communities:

• Job Losses: Approximately 900 corporate staff members are losing their jobs, and baristas at closed stores will be offered the opportunity to transfer to nearby locations but may still face uncertainty.

• Community Effects: Starbucks stores often act as neighbourhood hubs, so closures are expected to affect not just employees but also regular customers and local businesses.

• Union Reaction: The labor union Workers United criticised Starbucks for making major decisions without barista input, highlighting ongoing tensions between company leadership and front-line staff.

Starbucks’ Restructuring Strategy Explained

CEO Brian Niccol’s ambitious restructuring plan aims to revive the coffee giant’s fortunes:

• Store Footprint Optimisation: By closing underperforming outlets, Starbucks hopes to focus resources on more successful locations and new openings in high-potential areas.

• Investment in Store Experience: The company plans to refurbish over 1,000 existing outlets and enhance the café environment with improvements like faster drink service, free refills, and upgraded interiors to encourage customers to linger.

• Menu Simplification and Pricing Adjustments: Starbucks will streamline its menu by nearly a third and eliminate extra charges for non-dairy milk options.

Financial Implications of Store Closures

Starbucks expects the restructuring to have major financial consequences:

• Restructuring Costs: The initiative will cost about $1 billion, including $150 million for employee separation benefits and $850 million for store closings and exiting leases.

• Stock Market Reaction: Despite the announcement, Starbucks shares held steady in premarket trading as investors assessed the long-term impact of the transformation.

• Future Strategy: After the shake-up, Starbucks plans to resume expansion in 2026, indicating confidence in a leaner, more focused store portfolio.

Stakeholder Reactions and Industry Context

• Baristas and Corporate Staff: Affected employees have expressed disappointment and concern about the speed and scope of the closures, particularly those in unionised locations.

• Industry Analysis: Experts note that Starbucks’ move echoes broader trends in the food and beverage industry, where companies are consolidating locations in response to changing demand, labor challenges, and increased competition.

• Local Business Impact: Communities losing Starbucks outlets may see reduced foot traffic, impacting nearby stores and services.

Starbucks’ decision to close hundreds of stores across the United States and lay off nearly a thousand workers marks a dramatic shift in strategy aimed at countering falling sales and adapting to new market realities. The move, though challenging for staff and communities, is part of an ambitious long-term plan to restore Starbucks’ brand and profitability. As Starbucks begins to invest in remaining and new locations, customers and employees alike will be watching closely to see whether this radical transformation brings the desired turnaround.