Starbucks announced early Friday that it will lay off 300 corporate employees in its U.S. regional support offices and will consolidate some of those facilities. The company named several offices slated for closure, including locations in Atlanta, Burbank, Chicago and Dallas, and said it is evaluating its international support organizations with the expectation of further job reductions outside the United States.
According to the company, these actions form part of an ongoing initiative to sharpen focus, prioritize work, reduce complexity and lower costs. Starbucks emphasized that the moves are targeted at its support functions and will not affect the company’s coffeehouse operations.
Starbucks has absorbed rising costs in recent quarters as Chief Executive Officer Brian Niccol advances a turnaround strategy centered on strengthening operations on the coffeehouse floor. That strategy has included substantial investments in additional barista staffing. Company executives recently highlighted what they described as a milestone in the turnaround, reporting the strongest sales growth in more than two years. At the same time, Starbucks said operating profit margins have dropped by nearly half since the turnaround began in late 2024.
As part of the consolidations and workforce reductions, Starbucks said it expects to incur roughly $120 million in severance benefits for terminated employees. The company also disclosed a $280 million reduction to the book value of certain real estate holdings - primarily tied to its reserve and roastery locations and some non-retail support facilities.
The restructuring follows other recent moves by Starbucks to reallocate resources. Last month the company announced a $100 million investment to expand its footprint in the U.S. Southeast, including the opening of a new support office in Nashville, Tennessee, where Starbucks said it expects to house 2,000 employees over the next five years.
Shareholder-aligned incentives also feature in the company’s plans. Starbucks disclosed that its top executives could each receive awards of $6 million if specified cost-cutting targets are achieved by 2027 under an incentives program approved by the board last summer.
The company’s workforce has already been reduced in multiple rounds since the turnaround began. Among prior actions was a layoff of 1,100 corporate employees announced in February of last year.
Summary
Starbucks will cut 300 U.S. corporate jobs and close some regional support offices as part of a consolidation intended to reduce complexity and costs while the company pursues a turnaround focused on its coffeehouse operations. The firm is also reviewing its international support structure and expects additional job reductions abroad. The company will take significant charges related to severance and real estate write-downs but said coffeehouse operations are not affected.
Key points
- Starbucks will eliminate 300 U.S. corporate roles and close certain regional support offices, including Atlanta, Burbank, Chicago and Dallas.
- The company expects to pay about $120 million in severance and to reduce book value of some real estate by $280 million, primarily tied to reserve and roastery locations and some non-retail support facilities.
- Starbucks is reviewing international support organizations and anticipates further job cuts outside the United States; the changes are not expected to impact coffeehouse operations.
Risks and uncertainties
- The scale and timing of additional international job reductions remain unclear, creating uncertainty for global support operations and affected employees.
- Ongoing investments in coffeehouse staffing have coincided with falling operating profit margins, which could influence future financial performance and investor sentiment.
- Real estate write-downs and severance costs represent near-term charges to earnings, with potential implications for corporate profitability and cost structure.