A close-up of a Starbucks coffee shop sign on September 8, 2025 in Cardiff, Wales. (Photo by Matthew Horwood/Getty Images)
(NEW YORK) — Coffee giant Starbucks will lay off workers and close stores as part of a $1 billion restructuring plan, CEO Brian Niccol said in a memo to employees on Thursday.
The company will slash 900 employees at its stores in North America, Niccol said. The store closures will amount to a roughly 1% decline in the total number of Starbucks locations in North America in this fiscal year, after accounting for some store openings, Niccol added.
“While we’re making good progress, there is much more to do to build a better, stronger, and more resilient Starbucks,” Niccol said.
Shares of Starbucks ticked slightly higher in pre-market trading after the announcement early Thursday morning.
Starbucks weathered sluggish sales in recent years as customers weathered a years-long bout of elevated inflation, analysts previously told ABC News.
This is a developing story. Please check back for updates.
(NEW YORK) — Elon Musk-owned xAI on Monday sued tech giants Apple and OpenAI over an alleged scheme to illegally dominate the artificial intelligence industry through a collaboration that equipped iPhones with AI tools.
The exclusive agreement between the world’s largest smartphone producer and a top AI firm effectively shut other AI companies out of an opportunity to reach tens of millions of customers, according to the lawsuit filed in a Texas federal court.
“This is a tale of two monopolists joining forces to ensure their continued dominance in a world rapidly driven by the most powerful technology humanity has ever created: artificial intelligence,” the lawsuit says.
The lawsuit aims to “stop Defendants from perpetrating their anticompetitive scheme and to recover billions in damages,” according to the filing.
Last year, Apple unveiled a set of customizable tools that rely on generative AI, including a language feature that summarizes messages as well as an image generator. The product rollout marked the culmination of an agreement between Apple and OpenAI, the companies said.
The AI capability, called Apple Intelligence, amounted to the “next big step for Apple,” CEO Tim Cook said in June of 2024.
According to the lawsuit, the integration of OpenAI technology into the operating system of the iPhone left users without the ability to access AI products from other firms, such as xAI. In turn, the flood of user activity enjoyed by OpenAI gave the company valuable data with which to improve its products, the lawsuit says.
“More users beget more prompts, and more prompts offer more opportunities to train the model, whose better features then attract even more users,” the lawsuit says.
In a separate lawsuit, Musk is suing OpenAI over an alleged betrayal of the company’s founding mission in a sprint toward profits. Musk, the world’s richest person, co-founded OpenAI but left the company in 2018.
In a blog post last year, OpenAI rebutted Musk’s claims, saying the firm had realized that a for-profit entity would be necessary to acquire the resources to develop high-powered AI in accordance with its mission.
In a statement to ABC News on Monday, OpenAI rebuked Musk’s new lawsuit.
“This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment,” the company said.
Apple did not immediately respond to ABC News’ request for comment.
In 2023, Musk launched xAI, vowing to develop a competitor with established offerings like ChatGPT. Within months, the company launched a chatbot called Grok, which can respond to prompts from users of Musk-owned social media platform X.
(NEW YORK) — The Federal Reserve on Wednesday is set to unveil its latest decision on the level of interest rates, hoping to guide the economy through a topsy-turvy stretch of slow hiring and rising inflation.
The high-stakes announcement marks a flashpoint in the monthslong pressure campaign directed at the Fed by President Donald Trump.
In recent weeks, Trump has moved to fire one member of the Fed’s board of governors and secure Senate confirmation for another. Both officials are on track to be among the 12 policymakers who will cast votes on the interest-rate decision, though their status remained uncertain days before the Fed meeting.
The race to reshape the Fed comes after Trump railed for months against the central bank and its Chair Jerome Powell for declining to heed his call for lower interest rates. In July, Powell stressed the importance of political independence, saying it allows central bankers to make “very challenging decisions” based on “data.”
Still, the central bank is widely expected to deliver the policy shift long-sought by Trump, though the size of the rate cut will all but certainly fall short of Trump’s desired outcome.
Powell recently hinted at the possibility of a rate cut, appearing to indicate greater concern for flagging employment growth than for elevated prices. Investors peg the chances of a quarter-point rate cut at about 96% and a half-point cut at nearly 4%, according to the CME FedWatch Tool, a measure of market sentiment.
In a social media post on Monday, Trump reiterated his criticism of Powell, saying the Fed chair “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND.”
Five meetings and nine months have elapsed since the Fed last adjusted interest rates. The federal funds rate stands between 4.25% and 4.5%, preserving much of a sharp increase imposed in response to a pandemic-era bout of inflation.
In recent months, the economy has suffered a sharp hiring slowdown alongside an uptick of inflation, setting the conditions for what economists call “stagflation.”
The economic conditions have put Fed policymakers in a bind. If the Fed raises interest rates as a means of protecting against tariff-induced inflation, it risks tipping the economy into a downturn. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a hiring slowdown, it threatens to boost spending and worsen inflation.
Last month, Powell said the central bank faces a “challenging situation,” putting pressure on both sides of the Fed’s dual mission to maximize employment and control inflation.
Still, Powell said, the “balance of risks appears to be shifting” in light of a hiring slowdown made clear in a weak jobs report earlier this year that included sharp downward revisions of job gains over recent months.
Trump recently moved to fire board member Lisa Cook, who sued Trump over her attempted ouster, saying the decision violated her legal protections as an employee at the independent federal agency. Trump said he removed Cook over mortgage fraud allegations against her.
Federal law allows the president to remove a member of the Fed board “for cause,” though no president has attempted such a removal in the 112-year history of the central bank.
Last week, a federal judge issued a preliminary injunction requiring the Fed to let Cook continue serving in her role as a governor of the Federal Reserve System as her lawsuit moves through the courts.
Days later, the Trump administration filed a request with an appeals court asking to remove Cook by Monday, before the scheduled vote on interest rates. That day, an appeals court rejected Trump’s bid, clearing the path for Cook to vote at the Fed meeting. Trump may appeal the ruling to the Supreme Court.
Last month, Trump called on Cook to resign on the same day that Bill Pulte, the director of the Federal Housing Finance Agency, posted on X part of an Aug. 15 letter sent to U.S. Attorney General Pam Bondi accusing Cook of falsifying bank documents and property records to acquire more favorable loan terms, “potentially committing mortgage fraud,” the letter stated.
In a statement provided to ABC News at the time, Cook said she learned from the media about Pulte’s letter seeking a criminal referral over the mortgage application, which predated her time with the Federal Reserve.
“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” Cook said in the statement last week. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”
The Senate voted 48-47 on Monday to confirm White House economic adviser Stephen Miran’s nomination to serve as a member of the Board of Governors of the Federal Reserve, paving the way for Miran to cast a vote on interest rates.
Miran has vowed to safeguard central bank independence but said earlier this month that he does not plan to resign from his position within the Trump administration. Miran is filling a vacancy created by the early retirement of Fed board member Adrianna Kugler, whose term was set to end in January.
Miran said he plans to take an unpaid leave of absence from his current role. Miran reached the decision after “advice from counsel,” since his term on the Fed board would last four months, Miran said at a Senate hearing this month.
(NEW YORK) — The United States dollar is suffering its worst start to a year in more than five decades, likely triggering a price hike for some everyday items and a jump in expenses faced by travelers abroad, some analysts told ABC News.
The greenback has fallen more than 10% in value this year relative to a group of foreign currencies that belong to top U.S. trading partners.
Investors have fled U.S. dollars out of fear inflation could devalue the currency, especially as Congress has moved forward with a large spending bill set to worsen a decades-long trend of ballooning U.S. debt, analysts said.
Even more, they added, President Donald Trump’s fluctuating trade policy and sharp criticism of the Federal Reserve have prompted uncertainty about the nation’s economic stewardship, eroding trust in the dollar as the world’s preeminent “safe haven” asset.
Here’s what to know about the weakening of the U.S. dollar and what it means for you:
Why has the U.S. dollar weakened this year?
The value of the U.S. dollar – like most assets – is set by supply and demand.
For decades, the U.S. dollar has garnered eager demand due to the strength and stability of the U.S economy, which offers foreign investors a safe place to park their funds. In periods of global economic or political crisis, the U.S. dollar often receives a burst of interest from asset holders.
As a result, the value of the U.S. dollar has proven robust for generations.
The unusually sharp decline at the outset of this year owes in part to concern about a resurgence of inflation, which would reduce the spending power of the dollar and put downward pressure on its value, analysts said.
Trump’s tariff policy has stoked worry about price increases, since importers typically pass along a share of the tax burden in the form of higher prices. A potential increase in the national debt could also push up inflation, as the U.S. issues bonds to cover the cost burden.
“If I’m a central bank holding half a trillion dollars of U.S. Treasuries, essentially the value of that would decline with more inflation if I don’t take action now. If I think it might happen, I might shift to other assets like gold or the [Japanese] yen.”
Investors’ faith in the continued stability of the U.S. economy has also diminished, analysts said, pointing to growing U.S. debt, fluctuating tariffs and Trump’s attacks on the central bank.
Paolo Pasquariello, a professor of finance at the University of Michigan, attributed the decline of the dollar to “the recent erratic policy making by U.S. authorities.”
U.S. Treasuries, Pasquariello said, are no longer viewed as quite as safe an asset, meaning investors are less likely to “park their money during normal times and especially during times of distress.”
What does a weaker U.S. dollar mean for you?
A weaker U.S. dollar could result in higher prices for imported goods and steeper costs for travelers abroad, analysts said.
The anticipated rise in prices for U.S. consumers stems from the uptick in costs faced by importers paying for goods in U.S. currency. A foreign firm would likely demand a higher price since the dollars paid by a customer carry less purchasing power than they previously did, analysts said.
“If you’re buying light fixtures from a firm in India and they’re taking dollars, and they get fewer rupees for those dollars, they’re going to start to charge more dollars,” Richard Michelfelder, a professor of professional practice at Rutgers University, told ABC News.
The potential surge in the price of imports could compound the inflation risk posed by tariffs, analysts said, but the dollar-related price hike would hit just about every import entering the U.S.
“If you go online and buy a product that doesn’t come from the U.S., the price is likely to go up,” Michelfelder said.
A weaker dollar also means U.S. travelers abroad are likely to face higher costs since what’s in their pocket will exchange at a lower rate with foreign currencies, analysts said.
“If it takes more dollars to buy a euro and you’re going to Europe, everything you buy will cost more,” Michelfelder said.
The decline in the dollar does deliver some benefits, however. Foreign buyers face lower prices for purchasing U.S. goods, meaning exporters could receive a boost as their products become more competitive on the global market.
The favorable outcome for exporters could improve employment in industries like car manufacturing or advanced technology, while the relative strength of foreign currencies could bring additional tourists and expand the hospitality sector, Michelfelder said.
