January 24, 2009

Report: Starbucks may lay off 1,000

Starbucks Coffee Co. of Seattle is poised to lay off as many as 1,000 employees, a stock brokerage said in an e-mail to investors.

Diana Daggatt, managing director of McAdams Wright Ragen, informed its customers Friday that while no baristas are at risk of being idled, Starbucks will likely cut one third of its headquarters work force, along with some district managers and field employees, The Seattle Times reported Saturday.

The cuts might be next week or in February, Daggatt said in the e-mail.

Starbucks, which is scheduled to announce quarterly results Wednesday, did not comment on the report.

Howard Schultz, the driving force behind Starbucks' rise to international prominence, returned as chief executive officer one year ago. Falling sales have prompted the company to close 616 U.S. shops and cut back employees' hours, the newspaper said.

The company eliminated more than 2,000 jobs in 2008, including 180 in Seattle.

Starbucks spokeswoman Deb Trevino said the company is operating in an extremely challenging environment.

We need to be nimble, take advantage of what we're learning and adjust quickly to changing business conditions, she said. While we realize these changes are difficult for our partners, they are necessary for the long-term health of our business.

Starbucks stock is down 56 percent from its yearly high of $20.68, closing Friday at $9.08 a share, the newspaper said.