Starbucks Announces $1 Billion Restructuring Plan with Store Closures and Layoffs

"...The days of a Starbucks on every corner seem to be coming to an end...."

"...Comedian Lewis Black even riffed in 2001 that the 'end of the universe' was in Houston, Texas, where he found one Starbucks directly across the street from another...."

"...But both the universe – and Starbucks – have changed since then...."

"...Closing roughly 400 stores is like a rounding error for the coffee giant, which has more than 32,000 locations worldwide...."

"...Starbucks' turnaround has been 'made more challenging by ongoing macroeconomic uncertainty and the rapid expansion of drive-thru-focused competitors,' Hottovy said...."

"...Starbucks is attempting a comeback under Niccol after years of struggles, strategy missteps and a revolving door of CEOs...."

"...Starbucks' sales at stores open for at least a year have dropped for six straight quarters...."

"...Its stock has dropped roughly 9% so far this year...."

"...Investors and analysts have a high view of Niccol, who previously revitalized Chipotle and Taco Bell...."

"...He took over at Starbucks in September 2024 and received nearly $100 million in compensation last year...."

"...Niccol is trying to reposition Starbucks once again as a 'third place' between home and work...."

"...The company had veered too much into mobile orders and it 'took a lot of the soul' out of the brand, he said this year...."

"...Under Niccol, Starbucks has brought back its tradition of baristas doodling on cups in Sharpie pens; reinstated self-serve milk and sugar stations; cut 30% of the food and drink menu; ended its open-bathroom policy for non-paying customers; and laid off 1,100 corporate employees in February...."

"...However, some workers have complained about the changes, including complicated new drinks causing stress during rush hours and a bottleneck of cups to doodle on...."

"...Analysts, however, believe Starbucks is moving in the right direction and will be able to achieve a turnaround under Niccol...."

"...'We acknowledge the turnaround has taken longer than we expected, now likely moving into early-to-mid 2026,' BTIG analyst Peter Saleh said in a recent report...."

"...But he sees signs of progress in Niccol's initiatives...."

"...'We think once these start working, the impact will be significant,' Saleh said...."