Starbucks to close 200 stores, cut 900 jobs as CEO Brian Niccol moves forward with company's new plan

Starbucks is taking another step in its turnaround effort. The coffee chain announced on Thursday, September 25, that it will close about 200 stores this year and cut over 900 non-retail jobs. The move is part of CEO Brian Niccol’s “Back to Starbucks" plan to steady the business after a difficult year.

Niccol, who joined Starbucks a year ago after a high-profile run at Chipotle, had been expected to bring quick change. Investors initially cheered his arrival. Nasdaq reports that the stock jumped 25 per cent the day he was announced, but the results have been mixed since then.

Also read: Former Miss Universe Jamaica contestant Tyra Spaulding, 26, found hanging at home; suicide suspected

What Starbucks is changing

Niccol, in his statement, stated that the company has reviewed its store portfolio and will shut locations that do not meet customer expectations or show a path to profitability. With openings and closures combined, Starbucks expects to finish the year with around 18,300 stores in North America.

More than 1,000 Starbucks outlets will be refurbished over the next 12 months. Niccol described these changes as “introducing greater texture, warmth, and layered design.” Early feedback from the upgraded stores has been “positive,” and adding more staff during peak hours is also helping service, he added.

In addition, Starbucks will also close a number of open positions that were not yet filled alongside 900 current non-retail partner roles, in what Niccol calls a “difficult decision."

A similar move to 2008

The “Back to Starbucks" plan is similar to what Howard Schultz did when he returned as CEO in 2008. Schultz closed 600 stores, arguing that the chain had stretched too far and needed to reset. That move helped Starbucks regain its footing.

Starbucks is much bigger now, faces tougher competition from chains like Dutch Bros, and is navigating a weak consumer spending environment.

Also read: Viral optical illusion divides Reddit as users see two different faces. Is it a man or a woman?

Niccol remains optimistic

“We’ll unleash a wave of innovation that fuels growth, elevates customer service, and ensures everyone experiences the very best of Starbucks,” Niccol said in the latest earnings call, per Nasdaq.

Still, same-store sales remain under pressure, and the stock trades at a high valuation for a company in transition. Investors may need to stay patient as the “Back to Starbucks” plan continues.

FAQs

Why is Starbucks closing stores?

Starbucks said it is shutting stores that don’t meet customer expectations or show a path to profitability as part of its “Back to Starbucks” turnaround plan.

How many Starbucks stores are closing?

The company expects a net reduction of about 200 stores this year, leaving around 18,300 in North America.

How many jobs will Starbucks cut?

Starbucks plans to cut 900 non-retail jobs and will also close some open positions.

What else is Starbucks changing?

More than 1,000 stores will be refurbished to update designs and improve the customer experience.