My $4/day Isn’t Enough: Starbucks to cut up to 12,000 jobs, close 600 stores

Starbucks Corp announced today it plans to close 600 underperforming stores and eliminate as many as 12,000 full- and part-time positions.

Howard Schultz, the coffee chain’s founder and chief executive, retook the helm in January and quickly announced plans to shutter 100 underperforming outlets. With U.S. sales growth slowing, he slashed plans for store openings and shifted the company’s most ambitious expansion efforts to international markets.

Starbucks said the closures are spread across all major U.S. markets and that 70 percent of the targeted stores have been open since the beginning of fiscal 2006. The accompanying job losses would represent about 7 percent of the company’s global work force.Starbucks estimated that total pretax charges associated with the planned U.S. company-operated store closures, including costs associated with severance, would be in the range of $328 million to $348 million.

The Seattle-based company aggressively opened stores in areas such as California and Florida, which have been hardest hit by the U.S. housing downturn. Some investors, worried that the company had built too many outlets in the United States, pushed the company to increase the number of store closures.

Starbucks also said it will open fewer than 200 new U.S. company-operated stores in fiscal 2009, down from 250 previously.