Starbucks sends pink slips to 2,000

Starbucks sends pink slips to 2,000

SEATTLE The ax fell at Starbucks Corp. on Wednesday as nearly 2,000 employees, including 870 assistant store managers, were notified of job cuts that officials last month announced were coming as part of continuing efforts to cut costs and ensure the long-term health of the 16,000-unit chain.

On Wednesday, the job cuts included 500 non-store employees in the United States and Canada, including about 300 from the chain’s support center in Seattle. An additional 100 nonstore positions were cut last week.

Also on Wednesday, about 870 assistant store managers were notified that their positions were being eliminated and that an additional 530 open assistant manager positions would remain unfilled.

Overall, officials said the move is part of a plan to reduce the number of assistant managers in the United States from 4,000 to about 2,600 as the chain closes about 900 underperforming stores and cuts back on new growth.

“The change reflects our current business environment, along with recent and new store closures and the reduction in new store openings,” Chet Kuchinad, Starbucks’ executive vice president of partner resources, said in an internal memo. “The assistant store manager role continues to be critical; however, we no longer require as many positions.”

Some employees will be offered jobs elsewhere within the company, officials said. Those that are not will be offered separation pay, benefits and outplacement assistance.

Last month, Starbucks added about 300 stores [3] to the previously announced list of 600 underperforming units scheduled to close. Of those, 384 have closed and the rest are scheduled to be shuttered later this year.

Prior to Wednesday’s round of layoffs, about 1,500 positions had been cut as a result of store closures to date. About 70 percent of the impacted employees, however, have been reassigned to other stores, officials said.

With the job cuts announced Wednesday, Starbucks also said U.S. field operations would be re-aligned, and the chain would combine its Canada and Latin America regional districts to create one covering the Americas.

Last month, Starbucks reported a nearly 70-percent decline in profit during the first quarter ended Dec. 28. The company attributed the plunge largely to declining traffic as consumers cut back on spending amid the recession.

Earlier this week, the coffeehouse chain announced the March 3 launch of a selection of value-priced “breakfast pairings” [4] under $4 that officials said they hoped would build traffic.

Contact Lisa Jennings at [email protected] [5].