Seattle — Starbucks is facing a major shake-up as the coffee giant shutters hundreds of stores worldwide and eliminates hundreds of corporate jobs. The move, part of the company’s “Back to Starbucks” restructuring plan, comes with newly revealed severance packages for affected employees.
Under the plan, Starbucks will close underperforming stores across the United States, Canada, and Europe. The closures include high-profile locations such as the Capitol Hill Roastery in Seattle and other stores in cities like Atlanta, Philadelphia, and London. In total, the company expects to reduce its North American store count by about 1%, leaving around 18,300 company-operated stores. Additionally, about 900 non-retail roles are being cut.
For employees losing their jobs, Starbucks has laid out severance details:
- Baristas will receive 60 hours of pay
- Shift supervisors will receive 84 hours of pay
- Café attendants will receive 30 hours of pay
- All impacted staff will get a lump sum covering three months of COBRA health insurance premiums, with coverage through January.
- Workers in nine states will also be compensated for unused vacation hours.
Impacted employees have 45 days to accept the package, which requires signing a release agreement.
Starbucks CEO Brian Niccol defended the decision, saying closures are focused on locations where the company “can’t create the environment customers expect or where there is no clear path to financial success.” Niccol emphasized that the company will try to transfer staff where possible and is investing in remodeling more than 1,000 other stores to deliver what he described as “a warmer, more welcoming experience.”
But not everyone is convinced. Starbucks Workers United, the union representing thousands of baristas, criticized the move, saying workers were left out of key decisions and that many communities will lose stores that serve as vital gathering spots. In neighborhoods like Anacostia in Washington, D.C., residents expressed frustration at losing one of the few Starbucks in the area.
The restructuring is expected to cost the company about $1 billion, covering severance, leases, and related expenses. On Wall Street, Starbucks stock dipped slightly following the announcement, reflecting investor caution about the company’s turnaround plan.
As lawsuits, union pressure, and community backlash mount, Starbucks now faces the challenge of balancing financial performance with its public image and its long-standing reputation as a company that “puts people first.”
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