Layoffs, Cuts, and Billions at Stake: Starbucks Closes Stores and Seeks to Reclaim Its Position with Global Restructuring Plan

Written by Caio Aviz

Published on 02/10/2025 at 12:47

Aviso de fechamento em uma unidade Starbucks, ilustrando o processo de reestruturação bilionária da rede.

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Coffee Shop Chain Confirms Closures, Layoffs, And Bets On Renewal Of Units To Attempt To Recover Market Confidence

The Starbucks confirmed on October 1, 2024 the closure of hundreds of stores in North America. In addition, the chain announced the layoff of approximately 900 corporate employees.

The move is part of a restructuring plan estimated at US$ 1 billion, which was created to reposition the chain after results fell below expectations.

According to an official statement, the company closed 1% of its units on the continent. Thus, the total number dropped from 18,734 in June to 18,300 in September 2024.

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Restructuring Triggers Cuts And Strategic Changes

The company explained that the closed stores were unable to provide the expected physical experience for customers. Additionally, many had no prospects for positive financial returns.

The CEO Brian Niccol, who has been in charge since 2023, highlighted in a letter to employees: “This is an action that will impact partners and customers. Our coffee shops are community centers, and closing any unit is always difficult.”

In addition to the closures, there was the layoff of 900 corporate employees in October 2024. This number adds to the 1,000 layoffs made in February of the same year.

The employees received the official communication on September 26, 2024. However, the company ensured severance packages and support. At the same time, several open positions were frozen indefinitely.

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Store Renovation And Menu Adjustments

Even with the reduction of units, Starbucks announced it will renovate more than a thousand coffee shops by 2025. Thus, the company seeks to improve its physical presence.

These stores will receive more comfortable chairs, a greater number of outlets, and warmer colors. Therefore, the goal is to extend customer stay and enhance the experience inside the units.

Niccol had already promoted changes to the menu. There was a 30% reduction in offered items. In contrast, new products were included, such as revamped croissants, baked goods, and drinks with protein toppings and coconut water.

The chain also reintroduced self-service stations for milk and sugar. Additionally, it resumed the historical name “Starbucks Coffee Company”, reinforcing the brand’s origins.

Falling Stock And Internal Criticism

Despite the initiatives, the company has not yet achieved consistent results. Thus, Starbucks shares fell about 12% between October 2023 and September 2024.

Some measures also raised internal questions. Changes in uniforms led to legal actions. Furthermore, certain recently launched drinks were considered difficult to prepare during peak hours, increasing pressure on employees.

According to market analysts, Starbucks needs to balance the strategy of physical renewal and menu changes with expected financial performance. However, this balance depends on market reactions and consumer adaptations.

Key Points Of The Restructuring Plan

Closure of about 500 stores in North America.
Reduction from 18,734 to 18,300 units in three months.
Estimated cost of US$ 1 billion for the restructuring.
Layoff of 900 corporate employees in October 2024, in addition to 1,000 cuts in February.
Investment in the renovation of more than a thousand stores.
30% reduction in the menu and new products launched.
12% drop in stocks over 12 months.

Outlook And Next Steps

The restructuring plan is expected to be completed by 2025. However, the process will require constant adjustments.

For Starbucks, the challenge will be to balance cost-cutting and store modernization. At the same time, the company needs to regain sustainable growth and restore credibility in the market.

The CEO Brian Niccol stated that the goal is to rebuild the trust of customers and investors. However, this goal will require unpopular decisions in the short term.

Experts remind that the coffee shop sector faces cost pressures and shifts in consumer behavior. Thus, the immediate effects of the reforms may be limited.

Meanwhile, investors are watching the next quarterly results. Therefore, the market expects signs of recovery in sales and renewed financial stability.

Layoffs, Cuts, and Billions at Stake: Starbucks Closes Stores and Seeks to Reclaim Its Position with Global Restructuring Plan

Coffee Shop Chain Confirms Closures, Layoffs, And Bets On Renewal Of Units To Attempt To Recover Market Confidence

Restructuring Triggers Cuts And Strategic Changes

Store Renovation And Menu Adjustments

Falling Stock And Internal Criticism

Key Points Of The Restructuring Plan

Outlook And Next Steps

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Layoffs, Cuts, and Billions at Stake: Starbucks Closes Stores and Seeks to Reclaim Its Position with Global Restructuring Plan

Coffee Shop Chain Confirms Closures, Layoffs, And Bets On Renewal Of Units To Attempt To Recover Market Confidence

Restructuring Triggers Cuts And Strategic Changes

Store Renovation And Menu Adjustments

Falling Stock And Internal Criticism

Key Points Of The Restructuring Plan

Outlook And Next Steps

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