Niccol restructuring has eliminated thousands of corporate positions since 2024
Starbucks plans to open a new technology office in Chennai, India and is developing a smaller U.S. store format to compete with Dutch Bros and other fast-growing beverage chains, according to a Thursday report in The Wall Street Journal.
The strategic moves are the latest steps in a broader restructuring under Chief Executive Brian Niccol that has eliminated thousands of corporate positions and closed regional offices across the United States. Niccol, who joined Starbucks in September 2024, has set a public goal of cutting $2 billion in costs by the end of the chain’s 2028 fiscal year.
The company said it plans to close about 250 underperforming North American cafes this week, the second round of store cuts under Niccol. The closures will incur roughly $300 million in restructuring charges, the company said.
In a message to employees Thursday, Starbucks Chief Operating Officer Mike Grams said “some coffeehouses continue to underperform despite the hard work and commitment of all of you.” The company said it aims to transfer baristas from closing locations to other stores and offer severance to those who exit.
Starbucks last year spent months reviewing thousands of U.S. stores through a hush-hush effort internally referred to as “Project Bloom,” resulting in the closure of hundreds of U.S. locations executives said were not delivering the profit or customer experience the company desired. The review eliminated retail jobs.
“I think this is just good hygiene,” Niccol said in July about the company’s evaluation of store profitability and its decision to close locations.
The coffee chain owned and operated 11,149 North American stores at the end of June, down roughly 300 from the previous year’s period, according to company figures. The company has said much of its store growth in the short term will be outside North America.
The new technology office in India, announced earlier in the week, includes local hiring in the southern city of Chennai. The smaller U.S. store format is being developed to compete with Dutch Bros and other fast-growing beverage chains, and Starbucks is renovating hundreds of existing U.S. stores.
The corporate restructuring under Niccol has been equally sweeping. Starbucks last year laid off around 2,000 corporate workers while eliminating hundreds of open positions. The company said in August it would lay off more than 200 corporate employees, including workers in coffeehouse design, development and technology who declined to relocate to a new corporate office in Nashville, Tennessee.
Earlier this year, Starbucks laid off 300 U.S. corporate employees and closed regional corporate offices in Chicago, Atlanta, Dallas and Burbank, California.
The closures come near the end of Starbucks’s fiscal year, which concludes later this month — close to the same point in the calendar when the company announced last year’s round of store cuts.