Starbucks Corporation ( SBUX ) announced a sweeping restructuring initiative this week, including the closure of coffee shops and workforce reductions, as part of its "Back to Starbucks ( SBUX )" turnaround strategy.

The plan, approved by the board of directors in an exchange filing on September 23, 2025, aims to enhance the customer experience and allocate resources more directly to store operations.

The company said it will shutter underperforming coffee shops that fail to meet brand standards or lack a clear path to profitability.

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A majority of closures are expected by the end of the fiscal year, with total restructuring costs projected to be approximately $1 billion.

According to Benzinga Pro, SBUX stock has lost over 11% in the past year. Investors can gain exposure to the stock via Managed Portfolio Series Tremblant Global ETF .

Store Portfolio Review

Executives noted that the review of North American stores identified locations that were unable to deliver the physical environment Starbucks ( SBUX ) expects. While the closures will reduce company-operated coffee shops by around 1% in fiscal 2025, the company plans to expand again in fiscal 2026, ending the current year with nearly 18,300 outlets across the U.S. and Canada.

Starbucks ( SBUX ) also intends to refresh more than 1,000 stores in the coming year with updated designs and layouts.

The restructuring will include approximately $150 million in separation benefits, $400 million in asset impairments, and $450 million in lease-related charges.

Roughly 90% of the financial impact will be borne by the North American market.

The company expects about $400 million of the charges to be non-cash items, with the remainder tied to cash outflows such as severance and lease exit costs.

Impact On Workforce

In addition to store closures, Starbucks ( SBUX ) will eliminate approximately 900 non-retail positions and consolidate many unfilled roles.

Employees affected will be offered severance packages and, where possible, transfers to nearby stores.

Brian Niccol, chairman and CEO, said the decisions were difficult but necessary to ensure a stronger and more resilient Starbucks ( SBUX ).

Starbucks ( SBUX ) emphasized that investments will continue in store-level staffing, customer service, and store design.

Early results from pilot upgrades showed stronger customer traffic and improved service times. The company reaffirmed its long-term commitment to expansion and innovation despite the near-term restructuring.

Price Action: SBUX shares are trading lower by 0.35% to $83.92

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