Starbucks will incur approximately USD 1 billion related to the store closures, support organisation transformation, and other restructuring activities
As part of the company’s ‘back to Starbucks’ strategy, Starbucks has notified a USD 1 billion restructuring plan that involves the closure of coffee houses, laying of jobs. The company expects that a majority of the store closures will be completed by the end of this fiscal year.
Starbucks estimates that it will incur approximately USD 1 billion related to the store closures, support organisation transformation, and other restructuring activities, with 90 per cent of the expenses attributable to the North America business. Of the total restructuring charges incurred, the company estimates a breakdown of approximately USD 150 million related to employee separation benefits, it said in a regulatory filing.
Approximately USD 400 million will be directed towards the disposal and impairment of company-operated store assets, and approximately USD 450 million primarily associated with accelerated amortization of ROU lease assets and other lease costs due to store closures prior to the end of contractual lease terms.
“During the review, we identified coffeehouses where we are unable to create the physical environment our customers and partners expect, or where we do not see a path to financial performance, and these locations will be closed,” said Brian Niccol, Chairman and Chief Executive Officer.
Niccol noted that the company will end the fiscal year with nearly 18,300 total Starbucks locations – company operated and licensed – across the United States and Canada. In fiscal year 2026, Starbucks grow the number of coffeehouses it operates as it continues to invest in its business. Over the next 12 months, the company also plans to uplift more than 1,000 locations to introduce greater texture, warmth, and layered design.
The company is further reducing non-retail headcount and expenses. This includes the decision to eliminate approximately 900 current non-retail partner roles and close many open positions, Niccol added.
The ‘back to Starbucks’ strategy focuses on revitalising coffeehouses and enhancing the customer experience. As part of this strategy, the company assessed its existing store portfolio with respect to both whether coffeehouses had a viable path to offering the physical environment consistent with the brand and a clear path to financial performance. It will close those coffeehouses that do not meet these criteria. As the company works to build a stronger and more resilient Starbucks and prioritises investment closer to the coffeehouse and the customer, it is also further restructuring its support organisation, the official statement read.
