The figures being handled by the globally renowned Starbucks chain, based in Seattle, show that it is in trouble. The company has announced the closure of establishments in the United States and Canada, resulting in the elimination of nearly 1,000 jobs. This decision is part of the transformation strategy that the company has launched under the name ‘Back to Starbucks.’
On September 25, Brian Niccol, the company’s CEO, informed employees of the store closures and explained that it is due to these locations not having a sustainable financial performance. Employees of the physical stores may be transferred to other locations, but those in corporate or support roles will receive severance packages. The company’s intention includes investing more hours in baristas, improving the design of the cafes, and strengthening customer service.
The announcement comes in the same year that the company has faced class-action lawsuits in Illinois and Colorado, in which it expressed its refusal of a new dress code, and the company was accused of not reimbursing expenses related to these new rules. Undoubtedly, Starbucks is in deep trouble with constant drops in its stock on the New York Stock Exchange, as well as a decline in annual revenue and the continuous closure of establishments.
Starbucks against the ropes
Starbucks’ current situation is putting the company against the ropes. According to the most recent financial reports, Starbucks’ shares are experiencing declines on the New York Stock Exchange, specifically a 7% drop so far in 2025. In response to this situation, the company has begun taking measures that will mainly affect its workers.
Branch closures
Recently, the chain announced the closure of stores in the United States and Canada, which will result in the elimination of nearly 1,000 jobs. It is estimated that the United States will see a 1% reduction in its stores, going from 18,734 stores at the end of the last fiscal year to 18,300 as of June 29, 2025. This translates to the closure of 430 branches.
What will happen to the workers?
On September 25, Brian Niccol, the CEO of Starbucks, addressed employees to explain that closures would take place in stores that do not generate a sustainable financial performance or where the desired customer experience cannot be created. Workers whose employment was in the stores may be transferred to other locations, but those in corporate or support roles will not be so fortunate. Their positions will be eliminated, and they will receive the corresponding severance packages.
What direction does Starbucks want to take?
Among the plans of the new “Back to Starbucks” strategy, the chain intends to invest more in baristas (Green Apron Partners), improve the design of the coffee shops by offering a warmer space, with more outlets, seating, and free coffee refills, and strengthening customer service. It has also carried out the closure of “Pick Up” stores in more than 20 states, which did not meet the expectations of exclusivity for mobile orders and quick deliveries. According to Niccol, “the initial results show that where we have invested in more partner hours and redesigns, customers visit more frequently, stay longer, and share positive feedback”.
Workers’ Complaints
In addition to the discontent caused among workers by losing their jobs due to branch closures, 1,200 workers also protested in rejection of the new dress code. Additionally, the company has faced class-action lawsuits in Illinois and Colorado, demanding reimbursement for expenses related to these new regulations.