Starbucks will lay off 900 corporate employees and reduce its U.S. and Canadian stores by 1% as part of its recovery plan.

Starbucks to cut staff and close U.S. and Canadian stores

Starbucks announced it will cut 900 corporate jobs and close unprofitable stores in the U.S. and Canada. In a letter to employees, CEO Brian Niccol said the company is reviewing its location portfolio and plans to reduce its number of stores by 1% by the end of the year. That’s about 500 of the more than 18,800 stores it operates in North America.

The company is offering workers support packages and continued benefits. The moves follow a large-scale layoff of 1,100 employees that began earlier this year.

Focus on new investments

Starbucks is investing the savings in its coffee shops, planning to renovate more than 1,000 locations, increase staff presence and abandon the takeout-only model. The company also plans small renovation projects, investing about $150,000 in each coffee shop to return hundreds of chairs that were previously removed.

Niccol added that a new prototype coffee shop with 32 seats and a drive-thru will appear in 2026. In addition, Starbucks has reduced the cost of opening new locations by 30%.

Challenging sales dynamics

Despite the reforms, the company recorded its sixth consecutive quarterly decline in sales in the United States. Same-store sales fell 2% and the number of transactions fell 4%. This is less than analysts expected, but signals a difficult situation.

According to Niccolò, Starbucks is looking to “bring back the authentic coffee shop experience,” combining modernized spaces with innovative formats to restore growth.

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