After launching its first India GCC, Starbucks closes 250 stores and cuts 900 jobs

Starbucks is moving in two distinct directions globally. Days after announcing plans to establish its first Global Capability Centre (GCC) in India, the US-headquartered coffee chain confirmed the closure of around 250 underperforming stores across North America while continuing a wider workforce and cost restructuring programme under Chief Executive Brian Niccol.

According to reporting by The Wall Street Journal, the latest round of store closures forms part of Starbucks' effort to improve profitability, streamline operations and strengthen returns from its retail network. The move comes as the company simultaneously deepens its investment in technology and business capabilities through a new centre in Chennai.

Chennai GCC signals long-term technology investment

Earlier this week, Starbucks signed a Memorandum of Understanding with Guidance Tamil Nadu to establish its first GCC in India.

The facility, to be located in Chennai, is expected to create high-skilled employment opportunities for approximately 800 technology professionals.

Key details announced by the Tamil Nadu government include:

• The GCC will operate independently of Tata Consumer Products, Starbucks' retail joint venture partner in India.
• The centre is expected to support technology development and business solutions for Starbucks globally.
• The state government described the project as part of Tamil Nadu's strategy to attract high-value GCC investments and create skilled jobs.

Speaking during the announcement, Anand Varadarajan, Chief Technology Officer at Starbucks, said India remains an important market for the company. He cited Chennai's technology talent pool, relatively low attrition levels, infrastructure and government support as factors behind the decision.

The government has not disclosed the investment value of the project.

North America restructuring gathers pace

While the India announcement reflects expansion in one part of the business, Starbucks is simultaneously shrinking portions of its North American retail footprint.

According to The Wall Street Journal, the company will shut approximately 250 low-performing cafes across North America this week. Starbucks expects to record around US$300 million in restructuring charges related to the closures.

The latest closures mark the second major round of store reductions since Niccol became chief executive in September 2024.

In a message to employees cited by The Wall Street Journal, Chief Operating Officer Mike Grams said some stores continued to underperform despite employee efforts. Starbucks said it plans to transfer baristas where possible and provide severance support for affected workers who leave the company.

Job cuts extend beyond retail operations

The store closures are part of a broader restructuring effort already approved by Starbucks' board.

According to company disclosures cited by The Wall Street Journal, the restructuring programme includes:

• Approximately 250 store closures across North America.
• Around 900 corporate job cuts over multiple rounds.
• Roughly 2,000 corporate roles eliminated in the previous year, alongside the removal of hundreds of vacant positions.
• More than 200 employees dismissed in August after refusing relocation to the company's Nashville office.
• An additional 300 corporate positions eliminated following the closure of regional offices in Chicago, Atlanta, Dallas and Burbank.

The company previously estimated total restructuring expenses of approximately US$1 billion, with most of the costs linked to its North American operations.

The projected expenses include employee separation benefits, impairment of store assets and lease-related costs associated with closing locations before lease expiry.

Cost discipline becomes a strategic priority

Starbucks' restructuring reflects a broader effort to improve operational efficiency as consumer preferences, labour costs and competitive pressures reshape the restaurant sector.

According to The Wall Street Journal, Niccol has set a target of reducing costs by US$2 billion before the end of fiscal 2028.

As of late June, Starbucks operated 11,149 company-owned and company-operated stores across North America, roughly 300 fewer than a year earlier.

The company has also indicated that a significant share of future expansion will occur outside North America. It is simultaneously exploring smaller-format store concepts for the US market.

A tale of expansion and consolidation

For India, the Chennai GCC announcement reinforces the country's growing position as a global technology and business services hub. For Starbucks, it highlights a strategy that combines investment in digital and technology capabilities with tighter control over costs and physical retail operations.

The contrast is notable. While hundreds of technology roles are being created in Chennai, Starbucks continues to rationalise stores and corporate functions elsewhere as it seeks to reshape its business for the next phase of growth.