Starbucks Closes 250 North American Cafes in Turnaround Push

Starbucks Coffee Company is closing approximately 250 underperforming cafes across North America, representing about 1% of its regional portfolio. Announced on September 24, the closures are a central component of CEO Brian Niccol's "Back to Starbucks" turnaround strategy, which aims to reduce annual costs by $2 billion by 2028. Chief Operating Officer Mike Grams stated the company targeted locations that failed to meet financial performance standards or consistently deliver the desired customer experience.

The company expects to incur $300 million in restructuring charges, including $200 million in cash for lease exits and severance and $100 million in non-cash asset impairment. The closures include 20 unionized stores and affect locations such as the San Francisco Bay Area and Tuscaloosa, Alabama. To further streamline operations, Starbucks is laying off over 200 corporate staff in technology and design roles, following the layoff of 1,200 non-retail employees since last September.

Simultaneously, the company is investing $1 billion to remodel up to 9,000 locations, with 1,500 store "uplifts" scheduled for completion by September 30. This physical overhaul is paired with the Green Apron Service program and a $500 million investment in labor to improve barista-customer interactions. While the company lowered its fiscal 2026 net new opening forecast to 440 cafes to focus on international growth, it reported a 7.9% increase in global comparable sales for fiscal Q3.