Starbucks’ closing of stores across North America represents the coffee giant’s biggest restructuring move in years, with the company announcing plans to cut 900 corporate jobs and shut down hundreds of underperforming locations as part of a $1 billion overhaul. Starbucks closing stores will trim about 1% of the company’s footprint while SBUX stock keeps getting hit by declining sales and ongoing operational struggles.

Starbucks Store Closures, Layoffs, and SBUX Stock Pressure Explained

Company Targets Poor-Performing Locations

CEO Brian Niccol laid out the changes in a memo to workers, explaining how the company picked which locations would face Starbucks store closures. They looked at their North American stores and flagged ones that couldn’t meet customer standards or turn a profit.

Niccol stated:

“During the review, we identified coffeehouses where we’re 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.”

The whole thing will cost around $150 million for employee severance, plus another $850 million in store closure expenses. Starbucks closing stores is part of focusing on profitable spots while putting money into better customer experiences.

Financial Troubles and Stock Decline

Starbucks layoffs will hit 900 corporate workers, adding to the 1,100 positions they already cut back in February. The coffee chain just reported its sixth straight quarter of falling US same-store sales, dropping 2% in the latest period.

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SBUX stock has dropped over 8% this year, showing how investors are worried about the turnaround taking too long. The company had 18,734 North American locations at the end of June and expects to finish fiscal 2025 with roughly 18,300 stores.

Plans for Growth and Investment

Despite these problems, Starbucks plans to start expanding again in fiscal 2026 while also renovating more than 1,000 existing stores. They’re also making corporate employees come into the office four days a week starting September 29.

Niccol emphasized the long-term plan:

“I believe these steps are necessary to build a better, stronger, and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers, and the communities we serve.”

Starbucks closing stores fits into their “Back to Starbucks” plan aimed at creating better coffee shop experiences while fixing the operational problems that have been dragging down SBUX stock performance all year.

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