Starbucks to cut up to 12,000 jobs, close 600 stores

[strandinthewind]

I have to wonder if the stores are closing due to lack of demand. I mean how many times have you gone into a Starbucks and its been empty. I think the real reason more likely is that people see ten people in line and refuse to therefore wait 30 minutes to an hour for $5.00 coffee. I know I HATE that about Starbucks :shrug:


Starbucks to cut up to 12,000 jobs, close 600 stores

By Lisa Baertlein

Starbucks Corp (SBUX.O) said on Tuesday it plans to close 600 underperforming stores and eliminate as many as 12,000 full- and part-time positions, lifting shares nearly 6 percent.

The company, which has been grappling with the slowing U.S. economy and consumer spending at the same time that major competitors like McDonald's Corp (MCD.N) have begun attacking its core business, now plans to close a total of 600 underperforming stores by the end of March 2009.

Howard Schultz, the coffee chain's founder and chief executive, retook the helm in January and quickly announced plans to shutter 100 underperforming outlets.

With U.S. sales growth slowing, he slashed plans for store openings and shifted the company's most ambitious expansion efforts to international markets.

"At this point, management has decided that 2008 is a wash and to throw in everything but the kitchen sink to get ready for growth in 2009 and beyond," said William Blair analyst Sharon Zackfia.

"It's another sign that management doesn't have their head in the sand," said Zackfia, who has an "outperform" rating on the stock.

Starbucks said the closures are spread across all major U.S. markets and that 70 percent of the targeted stores have been open since the beginning of fiscal 2006. The accompanying job losses would represent about 7 percent of the company's global work force.

Starbucks estimated that total pretax charges associated with the planned U.S. company-operated store closures, including costs associated with severance, would be in the range of $328 million to $348 million.

The Seattle-based company aggressively opened stores in areas such as California and Florida, which have been hardest hit by the U.S. housing downturn. Some investors, worried that the company had built too many outlets in the United States, pushed the company to increase the number of store closures.

"This is validating some of the critics who said they were opening stores too close to one another," said James Walsh, an analyst at Starbucks investor Coldstream Capital Management.

Starbucks also said it will open fewer than 200 new U.S. company-operated stores in fiscal 2009, down from 250 previously.

The stock rose to $16.53 in late electronic trading, up 5.8 percent from its close of $15.62 on Nasdaq.

(Additional reporting by Nichola Groom and Jennifer Martinez; editing by Jeffrey Benkoe, Leslie Gevirtz)

http://news.yahoo.com/s/nm/20080701/bs_nm/starbucks_dc

[bucklind17]

All I know is that there are numerous places in New York City where you can walk out of a Starbuck, go about a block and there's another Starbucks. There's even one area in the city where there is essentially a Starbucks across the street from a Starbucks, which was across the street from a Barnes and Noble that had a Starbucks in it. Ridiculous.

[strandinthewind]

All I know is that there are numerous places in New York City where you can walk out of a Starbuck, go about a block and there's another Starbucks. There's even one area in the city where there is essentially a Starbucks across the street from a Starbucks, which was across the street from a Barnes and Noble that had a Starbucks in it. Ridiculous.

I know. But, my experience with those (esp. in NYC) is they are always full (at least five people in line). So, I wonder why they are not making any money. Again, I think it is because although there is a HUGE mark up in the coffee and other products, the service is pathetic and slow. Again, I see people in the drive through here in Atlanta that are still in line 30 minutes later when I get back from my run :eek:

Having said that, the $5.00 Green Tea is FAB as is the $7.00 large Frappucino :nod:

[estranged4life]

I mean how many times have you gone into a Starbucks and its been empty.

StarSUCKS just one time, to sell my original Fleetwood Mac ticket for the July 1,2003 show (Damn it has been 5 years already???) and I couldnt wait to escape from there - I felt the sudden urge to hug a tree, wear a pair of Dockers while driving a mini-van listening to Michael Bolton...Pure hell!!!

StarSUCKS did as well as CRAPPYCreme NO-Nuts did in OKC, as Empty as the thoughts of those running the family of MTV (aka EmptyVee) Music Channels - VERY Empty!!! Point to your head and spell the abbreviation of "Mountain"....There ya go!!!!

Brian "Get me the hell outta there" j.

[gldstwmn]

I have to wonder if the stores are closing due to lack of demand. I mean how many times have you gone into a Starbucks and its been empty. I think the real reason more likely is that people see ten people in line and refuse to therefore wait 30 minutes to an hour for $5.00 coffee. I know I HATE that about Starbucks :shrug:

It think it's just a preemptive strike because they know that things are going to get worse before they get better. Also they are guilty of over expansion. There are at least five of them in a two mile radius here. They're even in the grocery stores. Still I doubt they are losing money.

[JWS]

Starbucks is NOT losing money. They just over expanded into questionable locations...like suburban shopping centers. The senior management responsible for that is gone. Plus there are lots of competitors nearby like Coffee Bean and Peets, even 7-11. After the reduction Starbucks will still have around 7,000 locations.

[Richard B]

Finally some good news. Close them all.

[bucklind17]

Starbucks is NOT losing money. They just over expanded into questionable locations...like suburban shopping centers. The senior management responsible for that is gone. Plus there are lots of competitors nearby like Coffee Bean and Peets, even 7-11. After the reduction Starbucks will still have around 7,000 locations.

It's interesting, in the city, the only main competitors of Starbucks are Dunkin Donuts and now those are popping up EVERYWHERE. And we didn't have very many at all a few years ago.

I personally hate Starbucks actual coffee but I like their sweet drinks. I remember reading somewhere that they purposefully brew darker roasts because they are less appealing and they hope that customers will choose to order the more expensive drinks (lattes, fraps, etc.) instead of just getting a cup of coffee.

[jannieC]

It's interesting, in the city, the only main competitors of Starbucks are Dunkin Donuts and now those are popping up EVERYWHERE. And we didn't have very many at all a few years ago.

I personally hate Starbucks actual coffee but I like their sweet drinks. I remember reading somewhere that they purposefully brew darker roasts because they are less appealing and they hope that customers will choose to order the more expensive drinks (lattes, fraps, etc.) instead of just getting a cup of coffee.

Interesting. Coming from a heavy coffee background, (former barista and coffee house manager here! :wavey:) I will say that I am not fond of Starbucks brewed coffee. But their other products are pretty decent.

I've never really understood the hatred for Starbucks. It's my understanding that they are a great company to work for (part time employees, as well as same sex employees, are given full medical benefits) and the owner/CEO is also a philanthropist. Starbucks may not be your cup of tea (HA!) but I believe they paved the way for some truly excellent independent (and franchised) coffee houses.

[MacMan]

I think I've been to a Starbucks maybe twice in my life and bought just a regular coffe.... Can't wrap my head around spending $5 or more for all these fancy coffee's and drinks :eek: To me it's a waste!

[estranged4life]

Sucks to be a resident in Seattle - StarBucks losing jobs and now they have lost the NBA SuperSonics.

[Chrislit18]

Instead of putting so many in the huge cities, why not trying to expand more out here in rural areas.
I mean, there are two DDs in a 5 minute driving range from my house, and two more not too far from them.

I would kill for a Starbucks out here!! [There is a nice building for sale right across the street from my house on a nice major road....I would LOVE if one went in there!!!]. But the thing is, so many people hate the prices. We think DD is expensive, and I'm sure Starbucks would be outrageous.

It is over-priced, but the cold mochachino thing is sooo good.
It's just a shame so many people will be loosing jobs...

[Richard B]

I remember reading somewhere that they purposefully brew darker roasts because they are less appealing and they hope that customers will choose to order the more expensive drinks (lattes, fraps, etc.) instead of just getting a cup of coffee.

Wow. I didn't know that. I am not a fru-fru, fluff coffee drinker. I like coffee and I like it black. Starbucks coffee is really bad, it always tastes burned.

Give me Peet's, give me Ma & Pa coffee shop, give me a bag to home brew. Anything but Star****s.

[Macfanforever]

After all thease years i have not tried Starbucks coffee, I better check the one across town., Anyway The small town I live in, has about 7 Dunkin' Donuts here. including the ones in B.J's and Stop and Shop anyway Dunkin' Donuts are alway packed with customers to the gills.DD are probably stealing customers from Starbucks all these years for cheaper coffee.DD is like Home Depot to the Ma Pa Hardware store.

[SuzeQuze]

After all thease years i have not tried Starbucks coffee, I better check the one across town., Anyway The small town I live in, has about 7 Dunkin' Donuts here. including the ones in B.J's and Stop and Shop anyway Dunkin' Donuts are alway packed with customers to the gills.DD are probably stealing customers from Starbucks all these years for cheaper coffee.DD is like Home Depot to the Ma Pa Hardware store.

Dunks has also been expanding outside of the NE so they may be stealing business there unexpecedly. I am heading out to Dunks in a moment. :thumbsup: I prefer their coffee over the darker roast and more expensive Starbucks coffee.

[gldstwmn]

Give me Peet's, give me Ma & Pa coffee shop, give me a bag to home brew. Anything but Star****s.

I like Whole Foods 365 for $9.99 a pound. There is also a brand they sell called Royal Abyssinian that is the smoothest coffee I've ever had ( I drink it with organic half and half, nothing else).

[BombaySapphire3]

I loathe Starbucks and could care less if they all close I usually drink Nob Hill trading co. coffee on sale for %5.99 a bag...better than Starbucks IMO.

[Brwn_eyes0511]

All I know is that there are numerous places in New York City where you can walk out of a Starbuck, go about a block and there's another Starbucks. There's even one area in the city where there is essentially a Starbucks across the street from a Starbucks, which was across the street from a Barnes and Noble that had a Starbucks in it. Ridiculous.

Those are the Starbucks that I thought of when I first heard about this! The Starbucks that are so close together.. there really is NO need for that! I know I saw some like that on my last trip to DC. So I think some of the "extra" Starbucks are the ones that are getting the cut.

Now, in North Carolina.. there aren't ENOUGH Starbucks! :distress:

[Brwn_eyes0511]

I also know that, although they still have their HEAR music record label which has such artists as James Taylor, Carly Simon and Joni Mitchell signed to it.. they fired most of the heads of the label recently..

Don't know whats going on with them.. :shrug:

[stevierocks87]

Its their own fault for opening so many damn stores. Just here in Atlanta, there is a shopping center where you can stand at the Starbucks in Barnes and Noble and look into the Starbucks in both Target and Kroger. There are also places here too where they are literally blocks away from each other, and malls that have upper level and lower level Starbucks, in addition to the one in Barnes and Noble.

Their coffee is terrible- overroasted, burnt, like motor oil. I have to dose it with half and half. To me, the measure of really good coffee is if I can drink it black, which these days just seems to be at places like Waffle House, IHOP, etc.- There coffee is the best when it is fresh. Even since McDonalds started serving "premium" coffee, it is much too dark and I prefer the older cheaper kind!

As far as being a good place to work for, I worked there for about 3 weeks :o and I will say comparatively it is good with the health options, etc. but the reason I stopped working there is because I got terribly sick with mono, with a 103 fever, and couldn't find someone to cover my shifts after getting on the Starbucks store directory and frantically calling local stores to see if someone could cover my shift. I understand most retail outlets work like this- find your own replacement if you are sick- but I really don't think that is right. I understand if you just want to skip out of work, but if you are really sick or have had some kind of emergency and the manager knows you to be an honest person, they should find someone for you :shrug: Also, I was surprised at just how DIFFICULT a job it was, esp. at the location I was at, in the Macy's at Lenox (super posh mall in Atlanta- Buckhead). There was no seating except for a few tables outside, so almost all the customers were in a hurry to shop or get to work- very few "chill" folks. Treat those kids nicely and patiently everyone , they are workin' hard!

I will say that I agree with paradoxically they HAVE been largely responsible for the mass interest in coffee, coffeehouses, and coffeehouse culture, which has in fact paved the way for the explosion of independent coffee places. If someone chooses a Starbucks with an independent place nearby, that is not Starbucks fault :rolleyes:

So def. not a black and white issue- those are some of my feelings on Starbucks.

[bucklind17]

A few friends of mine who work at Starbucks recently told me that of the all of the stores being closed, FIVE of them are in the New York metro area. That includes all five boroughs of New York City and Long Island as well. So I guess we will still have a Starbucks on every block in these parts!

[Serrart]

What exactly do you mean by "latte"? I get Starbucks gave to the word a new meaning. In Italy if you ask for it in a bar, the barman will give you a glass of milk.

Romy

[bucklind17]

What exactly do you mean by "latte"? I get Starbucks gave to the word a new meaning. In Italy if you ask for it in a bar, the barman will give you a glass of milk.

Romy

A latte here is espresso and milk. Starbucks has many different flavors of lattes, like vanilla and mocha and caramel and raspberry white mocha and peppermint and etc. etc. etc.

[Serrart]

A latte here is espresso and milk. Starbucks has many different flavors of lattes, like vanilla and mocha and caramel and raspberry white mocha and peppermint and etc. etc. etc.

:laugh: Kudos to their creativity. And Americans pay also a lot of money for these lattes. Starbucks' creator is a genius. Now I understand why there isn't a Starbucks in Italy.

Romy

[stevierocks87]

:laugh: Kudos to their creativity. And Americans pay also a lot of money for these lattes. Starbucks' creator is a genius. Now I understand why there isn't a Starbucks in Italy.

Romy

:laugh: Oh we silly, silly Americans.