Starbucks to Shut Down 300 Stores
Starbucks, the world’s largest coffee chain, has recently announced to shut down its 300 stores in US and abroad amidst the slumping sales and low demand. With this move, it has been estimated that 6,700 employees both from corporate and cafe positions will lose their jobs, adding to already looming unemployment rate.
Starbucks, the world’s largest coffee chain, has recently announced its plan to shut down 300 stores after its first-quarter sales had drastically declined amidst recession.
According to the company, 200 local branches and 100 overseas will be closed, affecting 6,700 employees both from cafe and corporate positions. With this massive workforce reduction, experts warned that this number will add up to the already alarming increase of unemployment rate in the country.
Last month, Starbucks CEO Howard Schultz warned that sales will continue to decline for succeeding months after November’s sales hitting a record low as people spend less on premium coffee.
To cut costs, Schultz also plans to cut his annual base pay and sell the corporate jet, according to a company spokeswoman.
With these measures, the company is expecting to cut costs up to $500 million this year. Starbucks will be able to save more after the massive layoff was implemented.
For the past 12 months, the coffee giant has lost 51 percent of its stock.
In July 2008, the company has also shut down nearly 600 stores in the country and another 61 branches in Australia, affecting 12,000 employees. Meanwhile, Starbucks transferred almost 70 percent of employees from nearby stores, with 30 percent or nearly 3,600 people losing their jobs.
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