Starbucks to close 250 stores in North America this week in 2nd wave of cuts

Starbucks is set to close approximately 250 stores across North America, marking the second major wave of retail contraction under Chairman and CEO Brian Niccol, according to primary reporting from NBC Chicago. The latest round of shutters targets about one percent of the coffee giant's regional footprint and is scheduled to take place later this week, following an extensive internal portfolio review. The announcement coincides with ongoing corporate restructuring and runs parallel to broader shifts in the retail business environment.

Chief Operating Officer Mike Grams communicated the decision in a letter to employees, explaining that the affected cafes either fail to provide the desired atmosphere for patrons and workers or lack a viable path toward acceptable financial performance. Reporting by Fox Business noted that Grams called the cuts a difficult decision impacting partners, customers, and local communities. The closures arrive roughly a year after a larger wave of autumn reductions that saw hundreds of cafes shuttered across North America and Europe, as covered by PBS.

Media additions

"We have carefully reviewed our North America coffeehouse portfolio and identified locations where we do not believe we can consistently deliver the experience we want for customers and partners or where we don’t see a path to acceptable financial performance,"

Mike Grams, Starbucks Chief Operating Officer, via Fox Business

Financial details of the current restructuring plan reveal substantial costs for the corporation. According to Yahoo Finance, the company projects $300 million in restructuring charges tied to the move. This figure encompasses $200 million in cash expenditures for early lease exits and employee separation benefits, alongside $100 million in non-cash charges resulting from the disposal and impairment of coffeehouse assets. Despite these contraction measures, the company continues to adjust its broader outlook.

The precise list of closing storefronts has not been publicly released. KTVU reported that corporate leadership did not disclose the exact geographical breakdown or state how many outlets in individual states like Illinois will be impacted, though local outlets such as Patch noted that regional footprints like Illinois account for significant portions of the overall store base. Meanwhile, Daily Hive highlighted that Canadian operations will also absorb a share of the closures, though exact figures for Canada remain unconfirmed by corporate representatives.

Labor representation has raised immediate concerns regarding the selection of stores. Starbucks Workers United stated that 20 of the shuttering locations are unionized, accounting for eight percent of the total closures, as detailed by NBC Chicago. The union announced plans to send a formal request for information to management and engage in bargaining across every affected unionized store. More than 700 company-owned U.S. Stores have voted to unionize since late 2021, though a comprehensive labor agreement has not yet been finalized.

Management maintains that the store reductions run alongside a simultaneous reinvestment strategy. As part of an ongoing turnaround, the company is retrofitting hundreds of remaining cafes to create cozier, more inviting spaces with restored seating. Reports indicate that approximately 1,500 stores are slated for these renovations by the end of the fiscal year, a milestone that executives claim has provided clearer visibility into individual cafe performance. Net new store openings have been adjusted downward for the fiscal year as leadership pivots toward quality over sheer expansion velocity.

"This progress has given us a clearer view of the performance of every coffeehouse,"

Mike Grams, Starbucks Chief Operating Officer, via NBC Chicago

Affected employees will reportedly be prioritized for transfers to neighboring locations where feasible. For staff members who cannot be successfully placed elsewhere, the corporation has pledged severance support. What happens next depends on the execution of the closures later this week, the ongoing corporate dialogues with labor representatives, and the finalization of fiscal year reports concluding at the end of the month.