Starbucks announces more closures, layoffs
Starbucks will shutter 300 more stores and lay off about 6,700 employees this year, according to a memo from the coffee companys CEO, who cited the deteriorating economy.
The company said New York stores will be impacted, but it was still unclear yesterday how many of the approximately 188 franchises in the city could close.
These decisions have been made to ensure the company is leaner and prepared to endure a worsening economic climate, said Starbucks CEO Howard Schultz.The memo said Starbucks is shutting 200 underperforming stores in the United States, this on top of the 600 already slated to close. A final list of impacted stores will be determined by September.
The announcement came on the heels that its first-quarter profits dropped 69 percent with sales continuing to tank, according to the Associated Press. MarketWatch reported that Starbucks problems have been most acute in California and Florida, while Northeastern stores were operating at higher than normal demand.
The coffee company is also scaling back its plans to open stores, announcing yesterday that it will only open 140 new U.S. outposts compared to previous estimates of 200, according to the AP.
Schultz said he hopes to relocate store employees, which the company largely did during its last cuts. Others will receive severance packages, the memo said.