Starbucks CEO Brian Niccol has announced significant changes to optimize the company’s operations, focusing on enhancing customer experience and financial performance. The company plans to close certain coffeehouses in North America where it cannot meet customer expectations or achieve financial viability. This decision comes as part of Starbucks’ “Back to Starbucks” plan, aiming to bolster the company’s resilience and growth.
In a message to employees, Niccol expressed gratitude for their efforts to center world-class customer service in Starbucks’ mission. As the company approaches a new fiscal year, two major decisions have been made to align resources closer to the customer and propel business growth. First, a review of the North American coffeehouse portfolio led to the decision to close locations that do not meet customer expectations or where financial viability cannot be assured. This move, contributing to a 1% decline in Starbucks-operated locations in North America by fiscal year 2025, will leave the company with nearly 18,300 locations in the U.S. and Canada.
Starbucks also plans to invest in uplifting over 1,000 locations to enhance their design and atmosphere, fostering greater customer engagement. Partners at closing locations will be notified and offered transfer opportunities or comprehensive severance packages. In the future, Starbucks aims to welcome back employees as new coffeehouses open and expand staffing needs.
In addition to operational changes, Starbucks will reduce non-retail headcount by eliminating approximately 900 positions. This decision, part of a broader strategy to prioritize in-store partner roles, innovation, and customer service, is intended to support long-term growth. Affected employees will receive severance packages and benefits extensions.
Niccol assures that these steps, though difficult, are crucial for building a stronger and more resilient Starbucks, enriching its impact on partners, suppliers, and communities. As Starbucks continues its journey of transformation, the company’s focus remains on delivering exceptional service and customer satisfaction, ultimately driving success and creating more opportunities for all stakeholders involved.
These decisive moves aim to position Starbucks as a leader in the competitive coffeehouse landscape, ensuring long-term sustainability and prosperity.