Starbucks is laying off about 900 employees and shutting down hundreds of stores this month as part of its plan to revitalise the coffee chain.

CEO Brian Niccol announced on Thursday that the company will be letting go of non-retail headcount as part of a major overhaul of operations.

"This includes the difficult decision to eliminate approximately 900 current non-retail partner roles and close many positions," Niccol said in a message to staff.

Affected employees will be notified on Friday morning, and will be provided with severance and support packages, including benefits extensions.

"To those partners who will be leaving, I want to say a profound thank you. To those continuing on our turnaround journey, I deeply appreciate your commitment to helping us get back to Starbucks."

Starbucks store closures

Meanwhile, Niccol also announced that some Starbucks stores will be shuttered after a careful review of their portfolio.

"During the review, we identified coffeehouses where we're unable to create the physical environment our customers and partners expect, or where we don't see a path to financial performance, and these locations will be closed," he said.

The company had 18,734 stores in North America at the end of June. According to the CEO, these stores will decline by about one per cent in fiscal year 2025 after accounting for both store openings and closures.

"We will end the fiscal year with nearly 18,300 total Starbucks locations – company-operated and licensed – across the U.S. and Canada."

Affected coffeehouses will be notified this week, said Niccol, with transfers to nearby locations to be offered to employees where possible.

"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," Niccol said.

The CEO said the company recognises the impact of the closures and lay-offs to employees and their families, but underscored that the steps are "necessary."

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