The U.S. House of Representatives just passed President Obama’s economic stimulus package this afternoon (not a single Republican voted for it), but it won’t be in time to save 300 Starbucks stores or Howard Schultz’s executive compensation.
In a memo sent out from Schultz today, he announced that the company would be shedding some 350 more jobs at its headquarters in Seattle, and closing an additional 200 U.S. stores and 100 international ones. He also said that he was cutting his own salary to $10,000 this year, the minimum required to qualify for health care coverage. Last year Schultz received $9.7 million in salary, benefits and perks.
All in all, Starbucks expects to lay off approximately 6,700 employees over the next nine months.
Perhaps, although the econmomic turmoil affects us all in specialty coffee, the silver lining of Starbucks’ recent wobbles are the opportunities it opens for independent retailers and roasters to capture some of those customers. Any thoughts from your end? We’d love to hear. Let us know in the comments.
Thanks for the comments. We’re always interested in hearing what our readers have to say.
On the first question from Anthony – why mention that not a single member of a certain party voted for the bill – that was the headline of the story if you click through. It’s news. It’s not an opinion statement.
As for why there have been so many posts about Starbucks, frankly, they’re a huge industry player and they’ve been making a ton of news. In less than a year, we’ve gone from receiving a promo copy of Starbucked – a fairly entertaining read, but one which now is widely out-of-date which talked at length about how Starbucks had never had to close a store, now they’re approaching 900 stores closed. Also in less than a year, Starbucks has bought Clover, closed its stores for retraining baristas (for a few hours), canceled its hot sandwich offerings, reinstated its hot sandwiches, and on and on, and now has these big layoffs. The specialty coffee landscape would not be what it is today without what Starbucks has done, and I typically post these news stories about Starbucks wondering what specialty coffee will be like in the future with the big green giant playing a wholly different role.
Keep the comments coming!
Meh. I don’t see how all these posts about Starbucks are unique or surprising. They’re a specialty food/retailer/brand. Look at the goog finance page for sbux, click 1y and compare it with similar businesses/brands and they’re firmly in the lower middle of the pack. WFMI -71%, DELL -50%, SBUX -50%, GOOG -39%, NASDAQ/DOW JONES/ S&P500 ~ -35%, even AAPL -28%. For every (1) Intelly “groundbreaking concept”, I would wager there are probably (3) coffee retailer/franchisees that are struggling mightily this year. The difference is these folks aren’t listed and tracked on the exchange and their “shareholders” likely sit around the breakfast table with them in the morning. We don’t acknowledge or maybe don’t know something’s wrong until we see an out-of-business sign in the front window. I think it would be more interesting and possibly even instructive if you profiled some of these folks and what they’re doing to innovate and stay in the game during these tough times.
Sux to be all those employees.
Would still love to know why mentioning a certain party didn’t vote for the bill is necessary here on, OK it’s a blog, a site from a coffee magazine has to bring politics into things. What’s the point, and why?