Starbucks plans to lay off approximately 900 employees and close several stores in North America as part of a $1 billion restructuring initiative. CEO Brian Niccol announced these changes in a memo to employees on Thursday. The layoffs will primarily affect non-retail positions, and notifications will be sent to those impacted on Friday.

The company will also close an unspecified number of locations in the U.S. and Canada. This decision follows a review that indicated many stores are not meeting financial performance targets or failing to provide the expected customer experience. Niccol stated, "Each year, we open and close coffeehouses for a variety of reasons, from financial performance to lease expirations. This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centers of the community, and closing any location is difficult."

Starbucks anticipates ending the fiscal year with 18,300 stores in North America, a decrease of 124 locations from the previous year. This marks a rare instance of the company reducing its store count during a fiscal year. Niccol, who joined Starbucks a year ago, is known for his turnaround expertise, having previously led Chipotle to significant revenue and profit growth.

In light of the layoffs, Starbucks will provide severance and support packages to affected employees. The company has faced challenges in recent years, including sluggish sales amid ongoing inflation. Following the announcement, Starbucks shares saw a slight increase in pre-market trading. This is a developing story, and updates will be provided as more information becomes available.