Starbucks Corporation just announced an ambitious transformation agenda focused on streamlining its underlying business and delivering a world-class customer experience. To that end, the company plans to reduce its non-retail U.S. headcount, close underperforming coffeehouses, and invest heavily in its remaining stores. This initiative, part of Starbucks’ “Back to Starbucks” strategy, aims to build a stronger and more resilient brand for the future.
As part of its restructuring plan, Starbucks announced it will be cutting its non-retail partner roles by about 900 jobs. During this transition period, the company plans to communicate clearly with impacted partners in any coffeehouses that will ultimately close. Starbucks looks to this review and subsequent actions to simplify its operations and lower its cost structure. Some of these costs are extensive, with the majority of them expected to occur in fiscal year 2025.
None of the above Brian Niccol, the company’s chief executive, stressed how deep the decisions go. These decisions are important for focusing the operational plan strategy and maintaining business relevancy and competiveness in a dynamic industry landscape. He stated, “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.”
This action will bring the overall company-operated store count in North America to approximately 1% fewer by the end of fiscal year 2025. The picture for fiscal year 2026 appears sunny as well for Starbucks. The company continues to project growth in its total coffeehouse count. The company is committed to uplifting over 1,000 locations over the next 12 months, introducing greater texture, warmth, and layered design throughout its stores.
Focusing precious resources on proven operations succeeded, Niccol stated. He noted, “These steps are to reinforce what we see is working and prioritize our resources against them.” This strategic move is a natural continuation of Starbucks’ brand promise of delivering the best possible customer service while increasing operational efficiencies.
Starbucks has routinely opened and shuttered stores for various reasons, including ongoing financial viability and expiration of leases. As part of this restructuring effort, the company has conducted thorough reviews to identify underperforming stores that will be shuttered. With all of these closures, Starbucks is hoping to end fiscal year 2025 on a high note. They forecast almost 18,300 total sites in the U.S. and Canada.
In addition to the closures, Starbucks is investing over $500 million in labor hours across its company-owned cafes through its “Green Apron Service” initiative. This annual program allows us to invest in the customer service and experience that today’s patrons are looking for.
Just yesterday, Chipotle’s new CEO Brian Niccol said he’s bringing back a four-day in-office work week starting next month. This decision is an example of a deepening change in management practice to encourage a more creative and engaged workforce as well as meet business demands.