(The Center Square) – Starbucks CEO Brian Niccol announced on Thursday that the Seattle-based coffee giant is laying off 900 corporate employees and closing hundreds of stores across North America as part of its $1 billion restructuring plan.
This is the second time Starbucks has laid off corporate employees since Niccol was hired as the Starbucks CEO in August 2024. Earlier this year, the company laid off 1,100 workers at its headquarters.
In a letter to employees on Thursday morning, Niccol said the decision was “grounded in putting our resources closest to the customer so we can create great coffeehouses, offer world-class customer service, and grow the business.”
Last July, the corporation ordered its corporate employees to move closer to Seattle and work in-person four days a week in order to strengthen the company’s culture and “turn the business around,” as previously reported by The Center Square.
As part of its restructuring plan, Starbucks will close about 1% of its North American stores, going from 18,734 locations in June to approximately 18,300. The corporation also plans to “uplift” more than 1,000 locations to introduce “greater texture, warmth, and layered design” over the next year.
“We identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed,” Niccol said.
According to an SEC filing, Starbucks is estimated to incur approximately $1 billion related to the store closures and other restructuring activities. The total restructuring charges incurred include about $850 million, along with about $150 million in employee separation costs.
Two notable closures are within Seattle: the Roastery in the Capitol Hill neighborhood and the Starbucks Reserve store in the SoDo neighborhood. Notably, the Roastery’s employees were unionized. A Starbucks spokesperson confirmed the closures to The Center Square and said union representation was not a factor in its decision-making process.
Corporate employees being eliminated will be notified on Friday morning and will be offered “generous severance and support packages” including benefits extensions, according to Niccol’s letter.
“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,” said Niccol.
