Starbucks closures throughout Canada and the U.S. coming due to $1B restructuring, says CEO

Starbucks is closing some of its locations throughout North America, including in Canada, and eliminating around 900 non-retail jobs as part of a $1 billion sweeping restructuring .

The announcement was made Thursday by chairman and chief executive officer Brian Niccol in a post made to the Starbucks website .

“Our goal is for every coffeehouse to deliver a warm and welcoming space with a great atmosphere and a seat for every occasion,” Niccol said. But during a company-wide review, the company identified shops “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed.”

While Starbucks regularly opens and closes stores because of expired lease and poor financial performance, Niccol acknowledged that the restructuring will impact employees and customers .

“Our coffeehouses are centres of the community, and closing any location is difficult,” he said.

The company expects its total number North America stores to be reduced by about one per cent in fiscal 2025, ending the year with nearly 18,300 locations across the U.S. and Canada.

Meanwhile, he said Starbucks plans to upgrade more than 1,000 locations over the next year to “introduce greater texture, warmth, and layered design.”

Affected employees – referred to as “partners” – in closing stores will be notified this week.

Starbucks says it plans to offer transfers to nearby locations where possible. Otherwise, there will be severance packages and the possibility of being rehired as new stores open.

The layoffs come as talks between Starbucks and the Workers United union, which represents over 12,000 baristas, have hit a wall.

In December, some union members walked off the jobs in multiple U.S. cities. The strike spanned several days during the peak holiday season.

There were store closures, criticized by the union.

The company said earlier this year it would eliminate 1,100 corporate roles. In August, it also announced a modest 2 per cent hike to all salaried employees in North America this year.

Starbucks shares were down marginally in afternoon trading. They have risen about 9 per cent since Niccol took over in August 2024.

In his first year as CEO, Niccol zeroed in on investing in Starbucks’ stores to reduce wait times and restore a coffee-house environment, while also trimming management layers.

However, the company has posted a string of quarterly sales declines as demand for its expensive lattes took a hit from consumers.

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