Tough times for Seattle these days between Microsoft, Boeing and Starbucks. The first two can always bounce back (easily) but nothing can change the lousy taste of Starbucks coffee. At least the CEO has the common decency to have his own comp plan slashed during these tough times. I hope this doesn't mean he's going to pull the old trick of lowering one part and substantially raising another part of the plan but for now, it looks reasonable since he's firing more workers.
Thousands of baristas are to lose their jobs as Starbucks shuts stores to cope with dwindling sales of lattes, cappuccinos and frappuccinos as cash-strapped consumers lose their thirst for coffee.
The Seattle-based chain tonight revealed a 70% slump in quarterly profits to $64.3m and announced that it intends to shed 6,700 employees this year. It is closing 300 stores, two thirds of which will be in the US, on top of 660 shutdowns last year.
As the global economy turns sour, appetite for Starbucks' premium-priced drinks appears to be waning. Like-for-like sales fell by 10% at American stores and dropped by 3% elsewhere in the world - including a decline in the UK during the three months to December.
Starbucks' chief executive, Howard Schultz, is joining in the belt-tightening by asking the company's board to cut his basic salary from $1.2m to $10,000. Schultz, 55, dropped off Forbes' list of the world's billionaires last year as the value of his stake in Starbucks plunged.
