Starbucks in crisis: why the chain is closing branches in Los Angeles, Chicago, New York and more
Starbucks has closed hundreds of stores in California, Illinois, and New York. It has also announced layoffs and corporate closures.
Since last year, Starbucks has shut down hundreds of locations across the United States, including stores in California, Illinois, and New York. More recently, the company announced plans to lay off 300 employees in the U.S. and close several support offices.
Starbucks told CNBC that it had launched a review of its global corporate workforce and clarified that the announced layoffs would affect only corporate employees, not workers at its coffee shops.
Starbucks Aims to Cut Costs
The company estimates that severance packages and office restructuring efforts will result in approximately $400 million in restructuring charges. This includes $280 million tied to long-term asset impairments and $120 million in cash expenses related to layoffs.
We are taking further action under the Back to Starbucks strategy, building on our strong business momentum and working to return the company to durable, profitable growth. Leaders have taken a hard look at their respective functions to further sharpen focus, prioritize work, reduce complexity, and lower costs,” a Starbucks spokesperson told CNBC.
Why has Starbucks closed so many stores in the United States?
Consumer habits continue to evolve, and businesses are being forced to adapt. In 2025, CNN reported that Starbucks had closed 400 stores nationwide, many of them located in major metropolitan areas such as Los Angeles, Chicago, and New York City.
Late last year, the company explained that the closures were part of its $1 billion restructuring plan. Starbucks determined that its strategy of saturating urban areas to attract coffee drinkers had ultimately backfired.
What was once considered a winning strategy, being everywhere so customers could quickly grab a drink on their way to work or school, eventually became a challenge because of increased competition, the rise of remote work, and higher operating costs.
In 2025, Starbucks closed 42 locations in New York, 20 in Los Angeles, 15 in Chicago, seven in San Francisco, six in Minneapolis, and five in Baltimore, making them some of the hardest-hit cities.
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