Starbucks to cut 900 jobs, close 400 cafés in $1bn restructuring push

Starbucks is pressing ahead with another wave of corporate job cuts and café closures as chief executive Brian Niccol seeks to overhaul the coffee chain after a year of faltering sales and declining investor confidence.

The company confirmed a second round of layoffs at its Seattle headquarters, amounting to 900 positions, following roughly 1,000 job losses earlier this year. The cuts will be accompanied by the closure of hundreds of cafés across North America, part of a plan Niccol said was aimed at focusing the business on more profitable and sustainable outlets.

The Wall Street Journal reported that about 1% of the company’s footprint will be eliminated, bringing its North American store count from 18,734 at the end of June to about 18,300 by the end of September. The restructuring, which Starbucks estimates will cost $1 billion, comes as the group faces pressure to reverse a 12% slide in its share price over the past year and to revive flagging sales.

In a letter to employees, Niccol acknowledged the scale of the retrenchment. He said the cafés being closed were either unable to deliver the environment customers expect or lacked a path to financial viability. “This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centres of the community, and closing any location is difficult,” he wrote.

The closures are expected to be completed before the end of the current fiscal year. At the same time, the company pledged to remodel more than 1,000 outlets with warmer interiors, additional power outlets and more comfortable seating. The redesigned stores are intended to provide a sharper experience for customers and restore the chain’s appeal in a crowded market.

On the corporate side, affected employees will be notified by the end of this week. Starbucks said those impacted will receive severance and support packages, and many open roles will be permanently closed. “I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol told staff, adding that the measures were necessary to build “a better, stronger and more resilient Starbucks”.

Niccol, who joined the group a year ago, has moved quickly to impose change. He cut the menu by nearly a third in an attempt to simplify operations, while simultaneously adding new items such as protein toppings and coconut water to capture changing consumer tastes. Food options have been refreshed with new croissants and baked goods, while subtle changes — from reinstating self-serve milk and sugar stations to tweaking store signage — have been introduced to sharpen the company’s focus on coffee.

Yet the transition has not been smooth. Some of the changes, such as new uniforms, have faced resistance from baristas and even lawsuits. Others, such as complex new beverages, have drawn criticism from staff who say they are difficult to produce during peak trading hours.

Despite the current retrenchment, Niccol insists Starbucks will return to expansion mode.

Alongside remodels, the company is planning new openings in select markets and further product innovation. “These steps are necessary to deepen our impact on the world and create more opportunities for our partners, suppliers and the communities we serve,” he said in his message to employees.

The coming months will test whether Niccol’s $1bn gamble can reset Starbucks’ trajectory. For now, the closures and job cuts mark one of the most significant overhauls in the group’s recent history, as the storied coffee chain seeks to reclaim its position as the dominant global café brand.