Starbucks Closes Hundreds of North American Stores Amid Restructuring, Including Two in Santa Monica

Starbucks Corp. announced the closure of hundreds of underperforming stores across North America as part of a broader $1 billion restructuring plan aimed at revitalizing the coffee chain's operations. The move, which includes laying off approximately 900 non-retail employees, comes after six consecutive quarters of declining same-store sales and is expected to reduce the company's North American footprint by about 1% by the end of fiscal year 2025.

The company, which reported 18,734 U.S. and Canadian locations as of late June, anticipates ending the fiscal year with around 18,300 stores after accounting for both closures and new openings. CEO Brian Niccol described the decisions as necessary to redirect resources toward improving customer service, renovating existing locations, and fostering a more resilient business model. "We're building toward a better Starbucks by investing in green apron partner hours, more partners in stores, exceptional customer service, and elevated coffeehouse designs," Niccol stated in a memo to employees.

Among the affected locations are two Starbucks outlets in Santa Monica, California, contributing to the chain's efforts to address financial underperformance in select urban markets. One of the closures is at 2901 Ocean Park Blvd., at the intersection of 29th Street and Ocean Park Boulevard, a neighborhood spot that has served the community for years. Employees at the store confirmed to local observers that Friday marked their final day of operations, with laid-off workers expressing uncertainty about future employment opportunities within the company. The other Starbucks closure is at Wilshire and 26th Street, leaving Santa Monica still with more than 12 locations.

Letter from Starbucks explaining the closure.

Several baristas shared concerns over the abrupt end to their shifts. "Today was our last day-they told us in the morning," one worker said. "We've been asking about transfers to other locations, but no one's given us clear answers yet. It's tough, especially after putting in so much time here." Starbucks has stated that affected employees will be eligible for transfers to nearby stores where possible, though specifics vary by location.

The Santa Monica closures mark the second such shuttering in the city in recent years, following a 2022 closure on Main Street that was attributed to broader corporate strategy rather than local factors. The Ocean Park location, known for its steady foot traffic from nearby residents and commuters, was listed among dozens of confirmed closures identified through employee reports and the company's store locator updates.

While Starbucks has cited financial performance and physical environment challenges as primary reasons for the closures, some labor advocates point to the company's ongoing tensions with union organizing efforts as a potential contributing factor. Starbucks Workers United, representing over 12,000 baristas at more than 650 unionized stores, criticized the announcements as evidence of regressive management practices. "This makes it clear things are only going backwards at the chain," the union said in a statement, vowing to engage in effects bargaining for impacted union stores to secure worker preferences for transfers.

The union's push for first contracts has intensified since 2021, with workers advocating for better wages, job protections, and input on operational changes. Recent actions include strikes and lawsuits over issues like dress code reimbursements, amid allegations that the company has historically closed stores in response to union activity. A 2023 National Labor Relations Board complaint accused Starbucks of shuttering 23 locations specifically to deter organizing, though the company has denied such claims and maintains that union status played no role in the current decisions.

Starbucks store on Santa Monica Blvd and Pontius in West LA, near the 405 freeway entrance, is closed for good.

In Santa Monica, local union representatives echoed these sentiments, noting that the Ocean Park store had seen discussions around organizing in recent months. "Recent union efforts at certain locations like this one may have added to the pressures leading to these closures," one organizer remarked, though no direct causation has been confirmed. Starbucks has not commented on specific sites or union involvement. The two closing Santa Monica locations were not involved in unionization, and the quotes in this story pertaining to unions, do not come from the three women pictured in the photo above.

The restructuring, which includes $850 million in store-related charges and $150 million for employee separations, is projected to incur most costs in fiscal 2025. Despite the immediate impacts, Niccol emphasized a path forward, including renovations to over 1,000 stores and innovations to enhance the "coffeehouse" experience. Shares of Starbucks rose slightly in pre-market trading following the announcement, reflecting investor optimism about the cost-saving measures.

As communities adjust to the changes, affected workers in Santa Monica and beyond await details on support packages and relocation options. Starbucks plans to update its app with closure information this weekend, while the union continues to rally for greater worker involvement in future decisions.