Starbucks to close 600 outlets and cut 12,000 staff

9th July 2008

Roaster/retail giant Starbucks in early July said it planned to close 600 US stores and trim its staff by up to 12,000, according to a Reuters report.

Starbucks’ chairman Howard Schultz earlier this year had targeted 100 of the chain’s unprofitable American stores for closure, in response to increasing competition and stagnant traffic in its outlets.

The latest announcement increased the number of stores to 600 company-operated units. The related job cuts would reduce Starbucks’ workforce by about 8%, the report added.

The stores facing closure across the country are all near other Starbucks outlets, the company’s CEO Peter Bocian was quoted as saying. The majority of the stores scheduled for closure have opened since the beginning of the 2006 financial year, he added.

The Seattle-based company also said it was reducing to under 200 the number of stores it was planning to open in its next financial year, reflecting the effects on consumers of the recent downturn in the US economy.