Friday, February 22, 2008

Starbucks eliminates 600 jobs in restructuring

LOS ANGELES (Reuters) - Starbucks Corp (SBUX.O: Quote, Profile, Research) said on Thursday it would eliminate 600 jobs as it refocuses its business to reignite growth.

The coffee seller has been battered in recent months by slower consumer spending, higher milk and labor costs and concerns that it may have saturated its domestic market.

Seattle-based Starbucks has already announced plans to expand overseas and close underperforming U.S. stores.

Chief Executive Howard Schultz, who made the announcement in an e-mail to employees, is slated to share details of the company's strategy at a Starbucks shareholder meeting on March 19.

Shares in Starbucks, which were drifting lower prior to the announcement, were down 2.5 percent, or 45 cents, at $17.81 on the Nasdaq.

Schultz also said the company would double the number of its U.S. field organizations to four by March 24, in a bid to get closer to customers and employees -- which Starbucks refers to as partners.

Starbucks laid off 220 employees on Thursday. One-third of them worked in Seattle, spokeswoman Valerie O'Neil said.

Those employees performed a variety of duties from finance to design and marketing.

The company has also eliminated an additional 380 open positions, O'Neil said

None of those job cuts affect people working at Starbucks outlets, said O'Neil, adding that Starbucks has 170,000 employees.

McAdams Wright Ragen analyst Dan Geiman said the layoffs were expected.

"I don't think it's a surprise at this point," he said. - Drudge Report

LOL! This doesn't surprise me one bit. This is what happens when you put a Star bucks on every street corner. Don't get me wrong, I love Star bucks! I have a lot of friends that work there. Its just there are so many Star bucks coffee shops in the city. I go to school in Louisville and there is literally one on every corner. But it seems Star Bucks is starting to lose by mom and pop coffee shops. Thats what happens when you build up so many Star Bucks Coffee shops. I just hope none of my friends lose there jobs.

To bad Star bucks isn't doing to good right now because I have always thought about starting a Star bucks in my home town. Believe it or not the closes Star bucks to my family's house is 40 minutes away. I think I would make a lot of money if I build one here. It was a good Idea then But apparently that wouldn't be a good Idea now that Star bucks isn't doing to hot.

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