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Starbucks plans to close approximately 250 coffeehouses across North America later this week, marking another sweeping round of cuts under CEO Brian Niccol.
The company says the targeted cafés either cannot deliver the customer experience it wants or lack a path to acceptable financial performance. The closures amount to roughly 1% of its more than 18,000 North American locations.
CNBC reported the new round of closures as the announcement broke:
Chief Operating Officer Mike Grams laid out the decision in a message to employees Thursday. Starbucks says some cafés are still struggling despite broader gains.
It plans to close the roughly 250 locations this week, direct customers to nearby cafés and continue developing new locations. Grams tied the decision to both store economics and the experience employees can deliver to customers.
Grams said workers at affected stores are being contacted directly. Starbucks will offer transfers where it can and severance support to workers it cannot place elsewhere.
The company did not put a number on the jobs affected. Grams said most stores have benefited from faster service and a more welcoming café experience, but the performance of some locations has lagged.
Starbucks says it is accelerating renovations at existing cafés and still sees room to build new ones in North America. Closing these locations is part of that portfolio reshuffle, not an announcement that the chain is abandoning the region.
The Seattle Times put the size of the cuts in context: about one in every hundred North American Starbucks cafés.
The Associated Press reports that Starbucks closed 627 stores in North America and Europe last September and cut 900 nonretail positions.
Those layoffs were part of the earlier restructuring. Starbucks has not announced a job-cut figure for this week.
AP also notes that the company has not identified the cafés facing closure or disclosed how many are in the United States. It has not specified how many of the affected stores are unionized.
The labor picture is already complicated: more than 700 U.S. Starbucks stores have voted to unionize since 2021, according to AP, while the company and union have yet to reach a labor agreement. The report also notes a separate reduction of 300 corporate positions in May.
The company is simultaneously renovating existing locations. Grams says Starbucks is working toward 1,500 coffeehouse upgrades by the end of its fiscal year.
Management calls its “Back to Starbucks” strategy a success and says it remains committed to expanding in North America, even as it shuts another batch of weak stores.
One question remains unanswered for customers and employees: which cafés are on the list? The company has not released the locations or said how many of the 250 are in the United States.
There is still no public list of the closing cafés:
For now, the confirmed scope is North America, approximately 250 cafés, with closures expected later this week. Employees at affected stores are being notified directly.
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[ H/T WLT Report ]
