Why is Starbucks making these changes?
Starbucks has announced a major restructuring initiative across North America, which includes shutting down select Canadian coffeehouses and cutting approximately 900 non-retail positions. The company says the move is part of its “Back to Starbucks” plan, designed to refocus on its core business and improve the in-store experience for customers.
While Starbucks regularly opens and closes locations, this latest wave of closures is larger in scale. The company explained that certain stores are not meeting customer expectations for atmosphere and environment, or do not show long-term financial potential. Those locations will be permanently closed.
Despite the closures, Starbucks expects its total number of company-operated stores in North America to decrease by only about one per cent in 2025. By year’s end, nearly 18,300 stores will still be operating across Canada and the United States.
What will happen to affected employees?
Employees whom Starbucks refers to as “partners” at the closing stores will be notified this week. The company says it is working to transfer as many staff as possible to nearby locations. For those unable to transfer, Starbucks has committed to offering comprehensive severance packages and support, with the hope of rehiring when new stores open.
Alongside the store closures, Starbucks will cut around 900 non-retail roles and close many open positions. Impacted employees will receive severance and extended benefits as part of their transition.
The company says it remains committed to its employees and customers. More than 1,000 stores will undergo upgrades over the next year, focusing on warmer designs, improved service, and increased staffing hours. Starbucks’ CEO, Brian Niccol, emphasized that these steps are intended to create a stronger, more resilient company that continues to serve its communities.
What does this mean for customers?
Although some neighbourhoods will lose their local coffeehouse, Starbucks maintains that the majority of stores will remain open. The company says the investment in design, service, and innovation will ultimately create a better customer experience across its remaining locations.
What Should Starbucks Employees Know About Severance?
If you’re a Starbucks employee in Canada impacted by upcoming store closures or non-retail job cuts, it’s important to understand your severance rights before making any decisions.
While Starbucks has stated that severance packages will be offered, the law in Ontario provides additional protection for non-unionized employees. Factors such as your position, length of service, and age can significantly affect what you may be entitled to. In many cases, employees could qualify for up to 24 months’ pay in severance.
At Whitten & Lublin, our employment lawyers focus on ensuring employees receive the fair compensation they deserve during workplace transitions. If you’ve been affected by Starbucks’ restructuring, we encourage you to get legal advice before signing any documents.
Contact us today for a confidential consultation online or by calling (416) 640-2667.
FAQ’s
- Can Starbucks employees transfer to other locations?
A. Starbucks says it will try to transfer affected staff to nearby stores where possible, but this may not be guaranteed for everyone. - How many Starbucks stores will remain open?
A. After the closures, Starbucks expects to operate nearly 18,300 stores across Canada and the U.S. by the end of fiscal 2025. - Do Starbucks employees in Canada get severance pay?
A. Yes. Starbucks has stated it will provide severance to employees impacted by closures or job cuts, but Ontario law may entitle employees to more than the company offers.
