Starbucks to close underperforming stores and cut 900 jobs in strategic overhaul
September 26 - 2025
Coffee Geography Magazine
Global coffee giant Starbucks has announced a sweeping restructuring plan that will see the closure of underperforming stores and the elimination of 900 jobs, primarily in the United States. The decision marks a decisive step by CEO Brian Niccol to streamline the company and reverse a persistent sales slump in its most critical market.
The announcement, delivered to employees this week, frames the closures as a necessary "portfolio review" aimed at cutting costs and improving the customer experience. The stores targeted for shutdown, according to an internal letter from Niccol, are locations "unable to create the physical environment our customers and partners expect, or where we don't see a path to financial performance."
This is the second major round of cuts under Niccol's leadership, following the elimination of 1,100 jobs and a simplification of the US menu last February. The latest action underscores the persistent challenges facing the chain, which reported its sixth consecutive quarterly drop in comparable sales in the US this past July. The company's shares have reflected this struggle, falling more than 8% year-to-date.
The narrative from Starbucks, however, is not solely one of contraction. Even as it pares back its footprint in saturated or underperforming areas, the company emphasized it remains committed to expansion in key international markets. A spokesperson confirmed the business is still "on track" to open 80 new stores in the UK and 150 across the Europe, Middle East, and Africa (EMEA) region this financial year. This parallel strategy highlights a focus on redirecting resources to markets with stronger growth potential.
"We understand this is a more significant action that will impact partners and customers," said Niccol, acknowledging the human cost of the decision. The job cuts will predominantly affect support staff roles at the corporate level rather than in-store baristas.
Since joining Starbucks last year after a successful six-year tenure revitalizing Chipotle Mexican Grill, Niccol has been implementing a wide-ranging turnaround strategy. His playbook appears to borrow from his Chipotle experience, where he nearly doubled sales by focusing on operational efficiency and customer experience.
His efforts at Starbucks have so far included remodelling stores to improve seating arrangements and reintroducing popular self-service condiment bars—moves designed to lure back customers who have expressed dissatisfaction with wait times and the in-store experience. The latest store closures represent the most aggressive step in this revival plan, a clear signal that Niccol is willing to make tough decisions to ensure the long-term health of the brand.
As the coffee chain navigates this period of transition, the industry will be watching closely to see if trimming its physical presence will indeed help Starbucks recapture its former momentum and restore its standing with both Wall Street and its daily customers.