Starbucks to Close 1% of Stores, Cut 900 Jobs in Turnaround

Brian Niccol’s first year as Starbucks CEO was marked by what Bloomberg’s Michael Halen characterized as “cosmetic changes”—including the return of ceramic mugs—aimed at revitalizing the coffee giant’s customer experience. But the latest announcement signals a pivot to what Niccol himself describes as “the meatier part of right-sizing the company.” The decision to close approximately 1% of stores across the United States and Canada while cutting 900 jobs represents the most significant structural adjustment since Niccol took the helm, targeting inefficiencies in a network that spans 41,000 locations globally.

The scale of the cuts, however, drew a tepid response from Wall Street, with investors largely shrugging off the news. For a company employing 360,000 people as of last year, the job reductions amount to just 0.25% of its workforce, leading some analysts to speculate that deeper cuts may be necessary to achieve meaningful cost savings. The indifference suggests that markets were anticipating—or perhaps hoping for—more aggressive measures given Starbucks’ recent struggles with slowing sales and increased competition.

While store closures and job cuts are tangible steps, Melius Research analyst Jacob Aiken-Phillips voiced a concern echoed by other industry observers: the restructuring does little to confront Starbucks’ fundamental pricing challenge. “The changes being made still don’t ‘address that their prices have just gotten way too high’ for the current competitive and economic environment,” Aiken-Phillips noted, implying that operational tweaks may be insufficient if the brand’s affordability remains out of sync with consumer budgets.

The critique highlights a broader tension in Niccol’s turnaround strategy. Even as Starbucks streamlines its physical footprint, it continues to position itself as a premium experience in a market where value-oriented competitors are gaining traction. With inflation squeezing disposable income and rivals offering comparable beverages at lower price points, Starbucks’ ability to maintain its premium pricing without alienating its customer base emerges as the central unresolved question in its revival effort.

Starbucks’ global footprint—41,000 locations worldwide—adds complexity to any restructuring effort. Closing 1% of stores in the U.S. and Canada, while symbolically significant, represents a relatively modest contraction for a chain of this scale. The company’s vast employee base of 360,000 further contextualizes the 900 job cuts, raising questions about whether the moves are proportional to the challenges Starbucks faces.

The muted investor reaction suggests that the market may be waiting for more decisive action. For a company of Starbucks’ size, incremental adjustments risk being perceived as insufficient against the backdrop of evolving consumer habits, economic pressures, and intensified competition. The turnaround, as Aiken-Phillips concluded, “still has a long way to go,” implying that Niccol’s next steps will need to be more transformative if Starbucks is to fully reclaim its growth trajectory and justify its premium market position.