Starbucks to shutter 250 stores in North America in its second major round of closures in under a year and for the employees caught in the middle, the uncertainty is anything but cosy.
Quick overview (TL;DR:)
Starbucks is closing 250 North American stores, its second major round of closures since 2024, as it targets underperforming locations. Affected employees may be offered transfers or severance, but Ontario workers may have additional employment rights worth understanding before signing anything.
Which Starbucks stores are closing and when?
Starbucks has confirmed it will close 250 North American locations later this week, targeting coffeehouses that are either underperforming financially or failing to meet the experience standards the company is working to establish under its current leadership. The company has not disclosed which specific locations will close, how many are in Canada versus the United States, or how many of the affected stores are unionised.
Is this the first time Starbucks has done this under Brian Niccol?
No, and that context matters. This is the second significant round of closures since Brian Niccol took over as Chairman and CEO in 2024. Last September, Starbucks shuttered 627 stores across North America and Europe and eliminated 900 non-retail corporate positions. In May, the company laid off an additional 300 corporate employees and closed a number of underused U.S. offices. The 250 closures announced this week represent a continuing pattern of contraction, not a one-time correction.
Why is Starbucks closing these locations now?
Chief Operating Officer Mike Grams addressed employees directly in a letter, explaining that the ongoing retrofitting of Starbucks’ North American locations, aimed at making stores cozier and more inviting has given leadership a clearer view of how every coffeehouse is actually performing. What they found is that while most stores are benefiting from the momentum of those renovations, some continue to underperform despite the effort of their teams.
“While most are benefiting from this overall momentum, some coffeehouses continue to underperform despite the hard work and commitment of all of you,” Grams wrote.
The company expects 1,500 stores to be retrofitted by September 30, the end of its fiscal year.
What happens to Starbucks employees whose stores are closing?
Starbucks has said it will attempt to transfer affected employees to other locations where possible. For workers who cannot be placed at another store, the company has committed to providing severance support. However, no details have been shared publicly about the terms of that severance or how transfer eligibility will be determined, leaving many employees with more questions than answers.
Is Starbucks shrinking for good, or is this part of a bigger plan?
Despite the wave of closures, Grams was explicit that Starbucks remains committed to growing its store count in North America. The closures are being framed internally as a pruning exercise, removing underperforming locations to create a stronger, more consistent network rather than a retreat from the market. Starbucks shares rose less than one per cent in premarket trading Thursday, suggesting investors are taking a wait-and-see approach to the strategy.
Are you a Starbucks employee in Ontario affected by store closures?
If you are a non-union Starbucks employee in Ontario and your store is closing, you have rights and what you’re offered in a severance package may not reflect what Ontario employment law actually entitles you to receive. A transfer offer that requires you to commute significantly further, change your hours, or alter the fundamental nature of your role may not be a reasonable alternative and declining it may not disqualify you from severance.
The employment lawyers at Whitten & Lublin regularly advise Ontario workers through employer restructurings, store closures, and terminations across all industries. Before you sign anything, talk to us.
Contact us today at (416) 640-2667 or visit online to speak with a member of our team.
