Starbucks Corporation has unveiled a major $1 billion restructuring plan aimed at reversing its recent sales decline and streamlining operations. The Seattle-based coffee giant will cut approximately 900 corporate jobs and close underperforming stores, calling this a key step in CEO Brian Niccol’s broader “Back to Starbucks” turnaround strategy.
Strategic Moves to Address Declining Sales
Since Brian Niccol took the helm as CEO in September 2024, Starbucks has faced six consecutive quarters of declining same-store sales. The company reported a 2% drop in global comparable store sales in Q3 2025, with the U.S. seeing a sharper 2% decrease, driven by a 4% decline in transactions. In response, Starbucks plans to shutter locations that fall short of delivering the expected brand experience or lack a clear path to profitability.
“During our review, we identified stores where the physical environment and customer experience do not meet our standards, or where financial performance is uncertain. These locations will be closed,” Niccol said in a recent employee letter. The restructuring also includes eliminating many unfilled positions along with the layoffs.
Financial Impact and Market Reaction
The restructuring will incur roughly $1 billion in costs, primarily in North America. These charges break down into $150 million for employee separation benefits, $400 million for asset impairments related to closed stores, and $450 million for accelerated lease-related expenses. While around $400 million of these costs are non-cash, the rest includes cash outflows for severance and lease terminations.
Following the announcement, Starbucks shares rose slightly in premarket trading but have fallen 8% year-to-date, trailing the broader S&P 500’s 13% gain over the same period. Despite the short-term challenges, analysts remain cautiously optimistic about Niccol’s strategy to restore growth and profitability.
