Starbucks Plans 900 Job Cuts, Store Closures With $1 Billion Restructuring Charges

Starbucks (SBUX) announced on Thursday that it’s cutting roughly 900 corporate jobs and closing underperforming North American stores as part of a sweeping cost-reduction and reinvestment plan aimed at reviving its cafes.

Starbucks’ stock trimmed early losses to trade down 0.2% pre-market trade, at the time of writing. On Stocktwits, retail sentiment around the company improved to ‘neutral’ from ‘bearish territory over the past day. 

In an 8-K filing on Thursday, the coffee chain stated that its board has approved a restructuring plan that will close select company-operated locations and reduce non-retail headcount under its “Back to Starbucks” turnaround strategy. The company expects to book about $1 billion in related charges, with about 90% tied to its North American operations, and plans to complete most closures by the end of fiscal 2025.

“During the review, 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,” said CEO Brian Niccol in a letter to shareholders. 

Starbucks said its U.S. and Canadian company-operated store count will decline about 1% in fiscal 2025 after accounting for new openings, before returning to growth the following year. It added that savings will be redirected to store upgrades and expanded staffing, with more than 1,000 cafes slated for design overhauls in the next year. 

The coffee chain stated that affected employees will receive severance pay and, where possible, be offered transfers to nearby locations. The latest round of layoffs at Starbucks follows the company's announcement of 1,100 job cuts in February, earlier this year. 

Read also: Oklo Stock Is Down 5% Pre-Market Today – Here’s An Important Update

For updates and corrections, email newsroom[at]stocktwits[dot]com.