Starbucks is enacting a significant restructuring plan, closing stores and eliminating 900 corporate positions as part of a broader effort to revitalize sales and improve profitability. The company announced the closures and job cuts Thursday, signaling a sharpened focus on store performance and customer experience under recently appointed CEO Laxman Narasimhan.The move impacts employees across North America and represents a considerable shift in strategy for the coffee giant, which has faced recent challenges including slowing sales growth and increased competition. Starbucks intends to close underperforming locations-those unable to deliver the desired atmosphere or demonstrate a viable path to financial success-while simultaneously investing in upgrades for remaining stores. This restructuring aims to address evolving consumer preferences and operational inefficiencies, ultimately aiming to restore the brand’s momentum.
According to a memo to employees from Narasimhan, the company identified locations where it’s unable to create the physical environment customers expect or achieve acceptable financial performance.”Our goal is for every coffeehouse to deliver a warm and welcoming space with a great atmosphere and a seat for every occasion,” Narasimhan stated.
The restructuring follows a thorough review of Starbucks’ store portfolio and operational model. While the initial results of store upgrades-including increased staffing during peak hours-have shown promising signs of improved traffic, transaction rates, sales, and service times, the company’s overall financial results have yet to reflect a significant turnaround. Narasimhan detailed these “early results” in his Thursday communication.
Details regarding the specific locations slated for closure have not yet been released. The company’s proclamation comes as it filed a proxy statement with the Securities and Exchange Commission on September 23, 2025, outlining the strategic direction and financial outlook.
