Starbucks: to cut 6’700 jobs after earnings fall 69 percent

Seattle / WA. (sc) Coffee giant Starbucks Corporation said in its report of the company´s fiscal fist quarter 2009 that it will eliminate about 6’700 jobs because of the difficult economy. Starbucks said its profit dropped 69 percent in Q1/2009 to 64,3 million USD. The Corporation said it will close 300 underperforming stores in addition to the 600 it already planned to close in the United States. The company had planned to open 200 stores in the United States but will scale back to 140. Starbucks said the closings and other «labor efficiencies» could cost as many as 6’000 jobs. The company will also lay off 700 employees who work outside the stores. The company, which transformed American coffee into a custom-made beverage that sold for a premium, has been having problems as a tough economy forced even the caffeine-addicted to rethink their habits. Summary of Starbucks´Q1/2009 report:

«Consolidated net revenues were 2,6 billion USD for the first quarter of fiscal 2009, a decrease of six percent, compared with 2,8 billion USD for the first quarter of 2008, driven by a decline in consolidated comparable store sales of nine percent. During the quarter, the company recognized 75,5 million USD in pre-tax restructuring charges, primarily related to the U.S. company-operated store closures, which impacted first quarter of fiscal 2009 earnings per share (EPS) by approximately 0,06 USD per share. For the 13-week period ended December 28, 2008, Starbucks reported net income of 64,3 million USD and non-GAAP net income of 113,1 million USD, compared with reported net income of 208,1 million USD for the same period a year ago. Earnings per share for the quarter was 0,09 USD and non-GAAP EPS was 0,15 USD, compared with reported EPS of 0,28 USD in the first quarter of fiscal 2008 (…).

As one result, the company plans to close approximately 300 additional underperforming company-operated stores, approximately 200 in the U.S. and the remainder in international markets. These stores are in addition to the approximately 600 U.S. and 61 Australian market store closures announced in July 2008 (…). The company anticipates that the store closures, combined with reduced store openings for fiscal 2009 and other labor efficiency initiatives, could result in a reduction of as many as 6’000 store positions over the course of fiscal 2009 (…)». The complete press release is available here.

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