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Starbucks Announces 300 U.S. Job Cuts, Reports Mixed Fiscal Q1 Results

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Starbucks has announced a round of corporate layoffs affecting 300 U.S. positions and reported mixed financial results for the first quarter of fiscal 2026. The company is executing a restructuring plan aimed at improving operational efficiency and growth, under the strategy termed "Back to Starbucks."

Job Cuts and Restructuring

The company announced on Friday a reduction of 300 U.S. corporate jobs. The layoffs do not affect employees working in coffeehouses. Starbucks also initiated a review of its international corporate workforce.

The company expects to record restructuring charges of $400 million. This includes $280 million in noncash charges related to impairment of long-lived assets and $120 million in cash charges tied to the job cuts.

According to a company spokesperson, the actions are part of the "Back to Starbucks" strategy, intended to return the company to "durable, profitable growth." Leaders reviewed their functions to "sharpen focus, prioritize work, reduce complexity, and lower costs."

"Leaders reviewed their functions to sharpen focus, prioritize work, reduce complexity, and lower costs." — Company Spokesperson

Historical Context of Layoffs

This is the third round of layoffs since CEO Brian Niccol assumed the role:

  • February 2025: 1,100 job cuts announced, with several hundred other positions left unfilled.
  • Seven months later: 900 additional job losses for nonretail workers as part of a $1 billion restructuring plan.

As of September 28, 2025, Starbucks had 19,000 U.S. nonretail workers and 5,000 international employees in regional support operations roles.

Financial Performance

Starbucks reported mixed quarterly results for the period ended December 28. The company reported its first traffic growth in two years, which it attributed to its turnaround strategy, though the costs of this restructuring impacted net income.

Key Financial Data

Metric Result vs. Expectations Adjusted earnings per share 56 cents Below analyst expectations of 59 cents Revenue $9.92 billion Exceeded expected $9.67 billion Net income $293.3 million (26 cents per share) Decrease from $780.8 million (69 cents per share) in prior year

Net income declined due to turnaround costs, higher coffee prices, and tariffs.

Sales and Market Growth

  • Net sales: Increased by 6% to $9.92 billion.
  • Global same-store sales: Rose 4%, exceeding StreetAccount estimates of 2.3%.
  • Traffic: Grew by 3% globally — the first increase in two years.
  • U.S. same-store sales: Increased by 4% , driven by demand for holiday offerings.
  • International same-store sales: Grew 5% , including a 7% rise in China, the company's second-largest market.

Forward Guidance

Starbucks released its first financial outlook since October 2024, projecting for fiscal 2026:

  • Adjusted earnings per share: Between $2.15 and $2.40.
  • Global and U.S. same-store sales growth: At least 3% .

Following the report, shares increased by over 8% in premarket trading.

Store Development

  • Q1 Locations: Opened 128 net new locations during the quarter.
  • Fiscal 2026 Plans: Plans to open 600 to 650 new company-owned and licensed cafes.
  • China Operations: Announced plans for a joint venture with Boyu Capital for its China operations. The transaction is expected to close in the second quarter of fiscal 2026, subject to regulatory approval. The fiscal 2026 forecast includes continued operation of Starbucks China retail stores in the latter half of the year.
  • Previous Year: Approximately 400 U.S. locations were closed last year.

Upcoming Events

Further details on the company's strategy and new long-term financial targets are anticipated at an investor day scheduled for Thursday in New York City.