UrbanSwirl: Lifestyles of Color - More Signs of Recession: Starbucks to Close 600 Stores

More Signs of Recession: Starbucks to Close 600 Stores

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Written by Ebony Jones on Wednesday, 02 July 2008
Say it isn't so. Starbucks is set to layoff over 10,000 workers and close 600 stores in the U.S.

Starbucks, whose shares have plummeted more than 50 percent in the past two years, rose as much as 7.2 percent in late trading yesterday after saying it would eliminate 12,000 jobs associated with the closures. The cuts include full- and part- time employees and will happen over the next nine months, the Seattle-based company said in a regulatory filing.

Most of the 600 stores set to close were opened in late 2005 and 2006, Bocian said on the call with investors and analysts. During that time, more than 50 percent of the new stores had drive-through service, he said.

Clearly, this is another sign of the state of our economy. Starbucks product, pricey prepared coffee, while some may tout it as a necessity of life is cleary a luxury that in the times of nearly $5 a gallon gas people cannot afford any longer. It's a clear choice. A gallon of gas or a cup of coffee? The coffee is clearly losing out.

This massive set of store closings and layoffs will have a further negative effect on the economy, as the unemployed ranks will swell with former coffee pushers, and building landlords will suddenly have 600 vacancies to fill...this is not good on a real estate market already bloated with too much inventory for sale and for rent.

I feel for everyone who will lose their jobs in this latest sign of the times. And I 'm glad I don't drink coffee.

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Ellen () 07-02-2008 05:46:24

I'm not one bit surprised. I have a Starbucks about 3 times a week ($2.50) and their prices are getting ridiculous. I do enjoy some of their beverages though!!!

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Keywords: starbucks » » - layoffs » » - recession » » - economy » » - coffee » » - store closings » »

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