Starbucks Cuts 600 Jobs

Starbucks Cuts 600 Jobs
February 22, 2008

As part of Seattle-based Starbucks Corp.'s recently introduced Transformation Agenda, the company has announced plans to eliminate 600 support positions--a move it says will "better focus efforts on enhancing the customer experience." Howard Schultz, president, CEO and chairman, announced the organizational structure changes in an e-mail to the company's 170,000 employees. In what he called his "most difficult communication to date," Schultz said Starbucks conducted a thorough organizational analysis over the last several weeks, which was, "at times, very emotional and extremely stressful." Schultz then revealed the result of the review and organizational changes to restructure the company, which will result in a decrease of both the number of positions and partners by approximately 600. This total includes the elimination of existing positions and open headcount, as well as the reduction of Starbucks' current work force. About 220 employees--nearly all of which were U.S. partners serving in non-retail support roles--were eliminated from the company. Schultz announced modifications to Starbucks' organizational structure, which are designed to strengthen its focus on the customer in its U.S. field operations, and centralize and/or consolidate many of its support functions to drive functional excellence and reduce redundancies. Effective Monday, Feb. 25, the U.S. field organization will begin transitioning from two divisions to four, with full implementation completed by March 24. The new divisions are: Western/Pacific, Northwest/Mountain, Southeast/Plains and Northeast/Atlantic. The reorganizations of Starbucks' support functions are designed to consolidate functional activities into teams that have a shared vision and goals to support the business. The following support functions are being reorganized and/or consolidated: U.S. store development, U.S. licensed stores, U.S. finance, partner resources, marketing, in-store experience, global supply chain, global communications and partner and asset protection.