In a significant move to streamline its global operations, Starbucks has unveiled a sweeping restructuring plan that includes the immediate closure of hundreds of company-owned stores across the United States and Canada.

The coffee giant confirmed on Thursday that this strategic pivot will also result in the elimination of approximately 900 non-retail corporate positions. This decision marks a decisive step in the company’s broader turnaround strategy, shifting resources to prioritize high-performing markets and new growth initiatives.

The company emphasized that retail baristas working in affected locations will be prioritized for transfers to other stores wherever possible. Those who cannot be placed will be offered severance packages. While Starbucks did not provide an exact breakdown of closures by country, the majority are expected to occur within its North American footprint.

The restructuring carries a substantial financial cost, with the company projecting total expenses of approximately $1 billion. This investment will cover employee separation benefits, costs associated with physically closing stores, and exiting numerous leases.

This large-scale restructuring reflects the challenges facing even the most established retail brands in adapting to a post-pandemic consumer landscape. By consolidating its physical presence, Starbucks aims to strengthen its overall business model, focusing on digital customer engagement, store modernization, and expanding its successful drive-thru and pickup formats to better meet evolving consumer habits.