Starbucks announces plans to cut another 900 jobs and close more stores as its turnaround struggles continue

Starbucks (SBUX) announced plans to close unprofitable locations and cut corporate jobs as CEO Brian Niccol focuses on the company’s turnaround plan.

In a letter posted to its blog and sent to employees on Thursday, Niccol shared that the company plans to eliminate 900 non-retail roles and close open positions as part of a $1 billion restructuring effort. The memo said employees will be notified on Friday, Sept. 26, and will offer “severance and support packages including benefits extensions.”

“We will continue to carefully manage costs and stay focused on the key areas that drive long-term growth,” Niccol wrote.

This comes after the company laid off 1,100 employees earlier this year. Niccol said the company plans to use the savings to invest in its stores by adding more customer service employees. Other investments include new coffeehouse designs and innovations.

Corporate employees, including support partners and people managers, are now required to come to the office four days a week starting Sept. 30, Niccol said in July.

Sept. 9 marked one year for Niccol at the helm of the company, which continues to face turbulent times.

In its latest quarterly results, Starbucks posted its sixth straight quarterly drop in US same-store sales. US same-store sales fell 2%, in line with the prior quarter’s drop but less than the 2.5% drop that had been forecast. That was driven lower by a 4% decline in comparable transactions. Wall Street expected a sharper 4.5% decline.

Niccol also pointed to plans to reassess the store portfolio in the earnings call.

Now, the company plans to reduce its store count by roughly 1% in Canada and the US, reflecting both closures and openings, this fiscal year. By year-end, the total company-operated and licensed stores across the US and Canada will be nearly 18,300. As of Q3, there were 18,842 locations in North America.

“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 wrote.

Starbucks plans to invest in 1,000 locations over the next 12 months to double down on the cozy coffeehouse atmosphere as it moves away from pick-up-focused customer experiences.

During a call with investors in July, Niccol said Starbucks plans to execute small, targeted renovations of its stores, spending approximately $150,000 per location, to bring back the thousands of chairs for patrons it took away.

For new locations, Niccol said it was able to cut the build cost by roughly 30% and will introduce a new stand-alone prototype in fiscal 2026 that will have 32 seats and a drive-through.