Starbucks Is Closing 400 Stores This Weekend—4 Things We Know So Far

Even pumpkin spice latte season couldn’t pull Starbucks out of its slump. The international coffee chain announced on Thursday that it would be closing “underperforming” stores across North America this weekend, as well as laying off 900 corporate employees, according to The New York Times.

Starbucks CEO Brian Niccol wrote in a letter to staff that the coffee shops on the chopping block are those that were “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.” Here’s everything we know so far about Starbucks’ plans.

RELATED: Americans Are Abandoning Starbucks—Here’s Why, and What the Coffee Chain Is Changing.

1. Starbucks’ financials have been suffering for the past year.

As of July, foot traffic at Starbucks was down for six consecutive quarters. Along with increased labor costs and inflation, this greatly affected the company’s operating margins and in-store sales. And, as the Times reports, “The company’s shares have fallen about 12 percent in the past year.”

These financial woes began before Nichols moved from Chipotle to Starbucks in Sept. 2024, and he has been trying to course-correct ever since.

“While we’re making good progress, there is much more to do to build a better, stronger, and more resilient Starbucks,” he wrote in a public letter released yesterday. “As we approach the beginning of our new fiscal year, I’m sharing two decisions we’ve made in support of our Back to Starbucks plan. Both are grounded in putting our resources closest to the customer so we can create great coffeehouses, offer world-class customer service, and grow the business.”

2. Starbucks is returning to a “coffeehouse” model.

Nichols’ $1 billion restructuring plan includes a goal of attracting more people to Starbucks, centered on a return to the classic “coffeehouse” model.

During a July earnings call, Nichols announced that the company would “sunset our mobile order and pickup-only concept” to “improve and transform the foundations of our North American business so that we are reestablishing that moment of connection between a barista and their customer.”

In other words, Starbucks is closing all 80-90 pickup-only locations by the end of 2026. Many of these are located in big cities.

“We found this format to be overly transactional and lacking the warmth and human connection that defines our brand. We have a strong digital offering and believe we can deliver the same level of convenience through our community coffeehouses with a superior mobile order and pay experience,” he shared.

As for existing Starbucks locations, nearly 1,000 will be renovated to include comfy seating, cozy lighting, communal power outlets, local artwork, and locally inspired design elements.

RELATED: Customers Slam Starbucks’ Store Changes: “Just Fast Food, Zero Culture.”

3. Now, Starbucks is closing 400 underperforming locations this weekend.

In his open letter, Nichols noted that Starbucks would end its fiscal year this weekend with 18,300 stores across the U.S. and Canada. “In June, the company said it had 18,734 stores, suggesting around 400 stores would close. The company declined to confirm a figure,” The New York Times reports. This is a one-percent reduction in Starbucks’ footprint.

“Partners in coffeehouses scheduled to close will be notified this week. We’re working hard to offer transfers to nearby locations where possible,” he continued. “For those we can’t immediately place, we’re focused on partner care including comprehensive severance packages. We also hope to welcome many of these partners back to Starbucks in the future as new coffeehouses open and the number of partners in each location grows.”

Though the company has not yet released the affected locations, a spokesperson told USA Today that the Starbucks app would reflect the closures as of Sunday.

However, as USA Today reports, “A public Google sheet has over 200 entries marking likely closures as of late Sept. 25 and a Reddit thread of likely closures has over 230 comments.”

According to these unofficial lists, 67 locations will close in California alone. Employees at six Tucson-area stores confirmed they were shuttering, as did employees at six Twin Cities stores and 15 Oregon stores.

The Workers United union, which represents over 12,000 baristas, confirmed to Reuters that Starbucks’ flagship roastery in Seattle was closing, along with another unionized store on Ridge Avenue in Chicago.

It’s not yet clear if the roughly 90 pick-up-only locations are included in this count.

4. Additionally, 900 corporate employees are being laid off.

Nichols also confirmed in his letter that 900 corporate employees would lose their jobs, in addition to the 1,100 employees who were laid off earlier this year.

“Non-retail partners whose roles are being eliminated will be notified tomorrow morning (Friday),” he wrote yesterday. “We will offer generous severance and support packages including benefits extensions.”