Starbucks CEO Kevin Johnson announced store closures due to financial performance concerns, affecting physical environment and customer expectations. Renovations aim to create a more inviting space for customers. Baristas from closed locations will be transferred or receive severance packages. Share prices dropped less than 1% after the announcement.

In addition to store closures, Starbucks CEO Kevin Johnson plans to return to four days in office starting next month. Changes are part of the Back to Starbucks plan to focus on customer experience. Starbucks Workers United will engage in effects bargaining to place workers in other locations according to their preferences.

Starbucks will be closing some North America locations to focus on creating warm and welcoming spaces. The company will experience a 1% decline in company-operated stores by fiscal year 2025. Nearly 18,300 Starbucks locations will remain, with plans to uplift over 1,000 locations in the next 12 months.

Starbucks is reducing non-retail headcount by approximately 900 roles and closing open positions to prioritize investment in store partners and customer service. Non-retail partners impacted will receive severance packages. Employees are asked to work from home unless their job requires them to be in the office.

Starbucks CEO Kevin Johnson emphasized the decisions are necessary to strengthen Starbucks and deepen impact on the world. Uplifted coffeehouses have shown positive feedback and increased customer visits. Partners impacted by closures will be offered support, while those continuing on the journey are thanked for their commitment to the turnaround.

Read more at CNBC: Starbucks to close stores, lay off workers in $1 billion restructuring