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Starbucks to cut up to 12,000
jobs, close 600 stores
Lisa Baertlein
Reuters
Wednesday, July 2, 2008
Starbucks Corp (SBUX.O) said on Tuesday it plans to close 600
underperforming U.S. stores and cut up to 12,000 full- and part-time
positions, as it copes with an economic downturn and increasing
competition.
The coffee seller, bracing for its first full-year profit decline
since 2000, 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.
Starbucks plans to close the company-operated stores by the end
of March 2009. The related job cuts would reduce the company's
U.S. workforce by about 8 percent.
The news lifted shares nearly 5 percent.
(Article continues below)
In a conference call with analysts, Chief Executive Peter Bocian
said the move should improve company's domestic profitability
and help it meet previously issued forecasts calling for accelerating
earnings for fiscal 2009 through 2011.
In January, Starbucks brought back founder and chief executive
Howard Schultz to turn around the company. Soon after, Schultz
targeted 100 stores for closure -- a number that grew by 500 when
firm plans were announced on Tuesday.
He has also slashed plans for store openings and shifted the
company's most ambitious expansion efforts to international markets.
Full
article here.
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