Starbucks will close roughly 250 coffeehouses across North America and has agreed to abandon race- and sex-based hiring preferences companywide after settling a Florida civil-rights lawsuit.
The coffee giant's chief operating officer, Mike Grams, told employees Thursday that the company had reviewed its entire North American portfolio and identified stores that could not meet performance or customer-experience standards. The closures represent about 1 percent of Starbucks' more than 18,000 locations on the continent, but the announcement landed the same week the company finalized a separate, potentially more consequential deal: a negotiated resolution with Florida Attorney General James Uthmeier that strips DEI-style preferences from every corner of Starbucks' operations nationwide.
Grams framed the closures as a financial and operational cleanup. In a letter addressed to "Partners", Starbucks' term for employees, he acknowledged the human cost but pointed to stores that simply were not working.
Fox Business reported that Grams wrote:
"We have carefully reviewed our North America coffeehouse portfolio and identified locations where we do not believe we can consistently deliver the experience we want for customers and partners or where we don't see a path to acceptable financial performance."
He added that the company would execute the closures later this week and called the decision "difficult," saying the news "will be hard for the partners, customers and communities affected."
The store closures grabbed the headlines, but the DEI settlement may carry deeper long-term consequences for how Starbucks runs its business. Uthmeier's office filed suit against the company in December 2025, accusing Starbucks of violating the Florida Civil Rights Act by maintaining racial and sex-based goals, quotas, and preferences in its workplace policies. The resolution, reached last week, goes far beyond Florida's borders.
Under the agreement, Starbucks committed to eliminating race- and sex-based preferences in hiring, promotions, pay, executive compensation, mentorship programs, supplier selection, and board composition. The company also agreed it will not participate in outside organizations that require it to increase the racial diversity of its board of directors, a provision that could force Starbucks to withdraw from corporate governance pledges that became fashionable across Fortune 500 boardrooms in recent years.
Starbucks will pay $1 million to the Florida Department of Legal Affairs to reimburse the state for the time, expenses, and costs of bringing the case. And for the next four years, the company's chief legal officer must submit annual certifications confirming continued compliance with the terms.
Uthmeier made clear he views the outcome as a template, not a one-off concession.
"Every Floridian deserves to be hired, promoted and compensated based on merit, qualifications and character, not race or sex. This resolution ensures that Starbucks' policies and practices fully comply with Florida's civil rights laws. DEI can never be an excuse to violate civil rights."
The Florida attorney general's office confirmed that the settlement applies to all Starbucks operations across the country, not just locations in the Sunshine State. That distinction matters. A single state attorney general, armed with a state civil-rights statute, extracted a binding commitment that reshapes corporate policy from coast to coast.
The agreement covers nearly every lever a company can pull when allocating opportunity: who gets hired, who gets promoted, who gets paid what, which suppliers win contracts, and how the board itself is composed. Annual compliance certifications add an enforcement mechanism that goes beyond a press release or a voluntary pledge. For four years, a named officer inside Starbucks must sign off that the company is following through.
Several questions remain unanswered. Starbucks has not disclosed which specific markets or locations are among the 250 slated for closure, or whether any overlap exists between the store-closure review and the DEI settlement. The company has not named the chief legal officer responsible for the annual certifications. And the precise DEI programs or policies that triggered Uthmeier's original complaint have not been detailed publicly.
Grams characterized the 250 closures as roughly 1 percent of the North American store count, a fraction, on paper. But store closures hit communities and workers directly, and the COO's own language suggested these locations had been struggling for some time. Stores that lack "a path to acceptable financial performance" are stores that have already been underperforming, not stores caught off guard by a single bad quarter.
Paired with the DEI settlement, the week's developments paint a picture of a company under pressure to get back to basics, operationally and institutionally. Starbucks built a brand partly on progressive corporate signaling. Now a state attorney general has put that signaling under a legal microscope, and the company chose settlement over a courtroom fight.
When a corporation as large as Starbucks agrees to certify compliance with merit-based hiring for four straight years, it tells you something about how far the pendulum had swung, and how quickly it is swinging back.