No more layoffs planned at Starbucks, says CEO Schultz

Howard Schultz also says Starbucks will not continue to announce changes at the same fevered clip as it has during the past year. "I don't think we'll see as many, no," he tells Melissa Allison. Read "Howard Schultz says no more layoffs planned at Starbucks"

Comments

[Via Lost Wages]

Well Howard, what are we going to do with all those worthless DM's & RD's? It's not like they know how to do anything but send countless e-mails and forward the ones sent to them.

[Pat Nerr]

interesting

[beantheredonethat]

Good thing Howard never changes his mind.

[GRTL]

Oops...I'm sorry I didn't "plan" on laying off another 3,000 but I guess I have to....just baristas though...no dms

[TNT]

In Howards defence (and God knows he doesn't deserve this), but just maybe even he's finally seen the light.

NO MORE CHANGES FOR A WHILE!!!

Jesus, I've never seen anything like this before. It's like being in a three ring circus. Most partners must feel a bit car sick.

[Skippy]

Hopefully the changes do slow down. If this last year's made us feel like going through a spin cycle, I can't even imagine what our customers feel. I'm glad this newest promotion didn't bring any new drinks, "Hallelujah!" That's one thing I didn't like too much. "Good morning, Customer Bob! Try our new Blech Latte or Blech Frappucino! I guarantee it's been rushed to market, doesn't taste that great, and you won't be able to finish what's in your sample cup! Oh, but please buy one, for I have to sell 28 a day or my DM will send me a strongly worded e-mail!" Please let this be an end to the madness!

[Javaccino]

Well, too late for that, my store had enough coverage problems before this last round of lay-offs. I lost three co-workers from my store this week, and nice people, too. And then, there are the people I know who got layed-off just because they happened to be ASM's, without even an offer to take demotions.

This is like being told that you are not going to get punched in the face, after you just got punched in the face.

[javabuz]

the trick is they don't have to claim they are lay offs if they give people so few hours they are forced to quit.

[Asher]

I guess all the baristas and shift supervisors who will be losing their jobs due to optimal hours the next few weeks don't count...

[samurai]

*whew*

but we still cant avoid mean district managers and store managers who play favrotism if they decided to axe you....

[Badfoam]

Which face is Howard talking out of this time?

[Scott]

there will be another round of layoffs July/August...once the breakfast value meals, Via and Passeri are a bust...and we have another bad quarter.

[BOSTON STARBUCKS REBEL]

I think that if every American went to Starbucks and got a breakfast pairing. That would be enough to jump start our economy. We could nearly pour $1 billion into our economy in a day.

[white_knight]

what they are doing is cutting hours, pressuring shifts to write up baristas for the most dumbest things possible..in order to a.force them to quit (cause of being fed up with it) or b.have enough write up to fire the damn hard-working barista...im sure its somewhere in their agenda.working at starbucks isn't as great as it was back then ('05)..it is seriously starting to suck.

[4merOCSM]

To BOSTON STARBUCKS REBEL: I have been following your posts since I began 'haunting' this site many months ago. I read a lot, but don't write much now that I am indeed a 4mer partner. Your sense of irony and human dignity concerning Sbux is for the most part SO on the mark as to be absolutely frightening. It is good to read the thoughts of someone with their head screwed on straight. Keep on being, as Socrates was, a voice of reason in the eye of the hurricane. Thanx.

[Sam I am]

Is there a support group for people who once beleived in starbucks?

[Mybux]

I don't understand how meeting a goal of 35 usd's for pairings is a good thing. I would think that if people wanted to spend money on a grande mocha and a blueberry scone we would be better off. Having it on the menu should be enough rather than pushing it on customers who want to spend money on other items

[beanpleaser]

I still don't get why people continue to stand behind a company who just turned there back on and dismissed partners who poured their heart and soul into each and every customer! It's just a matter of time til it happens to you! Pour your heart and soul into it til you make too much...then we'll cut you loose!
Hey KJ out in Oak Harbor, your partners still hate working for you. I think its the hate they feel from your heart!

[BOSTON STARBUCKS REBEL]

In my line of the Starbucks Stimulus Plan SSIP, once we all get our extra little money in our paychecks in June. We should spend it at Starbucks. Therefore we could pour nearly $7 billion of consumer spending into the economy. If people only knew to spend money, instead of saving it.
Just spending maybe 10% of your paycheck at Starbucks would be enough to jump start the economy.
I believe that only Starbucks has the penetration into American society, the total ubiquity necessary to guarentee a true stimulus plan.

[Pat Nerr]

Sam I Am... Yes, there is... we all meet at Starbucks on Wednesdays...

[dulce de leche]

Pairings are a great PR move, but many analysts are right to ask: what will this to our bottom line?

At the store level, they are asked to meet a store target for how many pairings they sell each day. How many new customers will this generate as opposed to existing customers saving $1. In effect, Starbucks is cutting their margin to attract and (key word) retain customers. If it stops the bleeding in terms of customer visits, great! But what if it results in another disappointing quarter? What will the investors say then?

No doubt Starbucks studied this and found the specific pairing they're offering to offer the greatest marginal return.

From an investor's standpoint, Via is actually the best looking decision to come down in a while because it's low cost, relatively high volume, and a new market. I would imagine the per COGS per unit on Via to be no more than 20 cents.

If these stopgap measures work to keep Starbucks afloat, they will be excellently positioned once the economy picks up again. A leaner organization allows them more flexibility and more opportunity given positive cash flow.

[Ryan (SS)]

White_Knight:
If your shifts are writing you up, your stores got a problem. The only person allowed to write up a partner is a SM or above (they need to have the final signature)

[Have a Grande]

I don't know, Ryan. In our store SS write the corective action, then gives it to the SM, who then coaches the partner and has them sign. We are the liason since the SM cannot see everything nor be there every hour we are open.

[Blaze]

White-Knight you are absolutely right this is been going on for a while, so in order to reverse the balance you need to sabotage your Supervisor or SM and turn the tables on them...Let them be the ones taking the heat for all the mistakes, they should step up to the plate and take responsibility of how much of a terrible job they are doing.

[white_knight]

yeah, and trust me..at my store its the shifts that get away with alot more than any barista can. example shift has friends visit him, bam partner discount..or if they're on his "good" side he wont evn charge them..its this one specific shift that's been on my back lately. i guess it has become an "every-man for himself" environment...

[BOSTON STARBUCKS REBEL]

I think most store managers are just as worthless as an expired urn of decaf coffee.

[dm's got the gun to my head]

BOSTON STARBUCKS REBEL....
Not all SM's are worthless. The pressures on SM's from the DM level and up is frightful. You get forced into doing things because you're job is threatened if you don't.

I have a hard ethical balance. I do everything I can to protect my partners and give them the best work environment possible, but some things just get ripped out of my hands.

If there were any one thing about Starbucks that I could say I HATE its being forced into a position of throwing out ethics and integrity because I'm made too.

Believe me, the partners that were "released" from employment were probably not picked by the SM.

On a bright note, in August the core competencies are being reduced from 13 or so now to just 5. That will take out the hypocrasy a bit, even unethically speaking.

[729changedmylife]

I am so saddened by all this wishing that a whole group of partners would be fired or laid off.

I was a DM for Starbucks. I was one of those "externals". I had been in a DM role for various companies for the last 10 years but always thought Starbucks was my ultimate destination. Why? Because my leadership style is a perfect match for how Starbucks describes it's leadership expectations. Because of the Guiding Principles and my belief that the company used those as a daily checklist for how to behave.

I came on board, went through my 8 week store immersion. I asked if I could extend it 3 weeks as I really wanted to "master" store operations before I moved on. I thought it was inappropriate for me to lead a team when I wasn't 100% on the jobs they were doing. That was granted and I did master it (after 25 years in retail it really doesn't take years of moving up through the store ranks to be able to run one of the stores).

I then went through 4 weeks of DM training and was then assigned a district. My new team were so welcoming. They said it seemed like I had been with Starbcuks all along. That was the biggest compliment I could have had.

I worked alongside my team in their stores, I periodically ran shifts as rewards for them, I spent 2 weeks behind the counter in my apron at Christmas. I was in my stores 32 hours a week. I coached, led, taught, listened, collaborated, learned and developed great relationships. I promoted 4 Shifts to ASM and awarded one of my SM's Manager of the Quarter. It was a great year.

Then I was asked to move on to a new bigger district. Same story even better team. I built stonger relationships, and we did great things together. More Shift to ASM promotions as well as 2 ASM to SM promotions. I even promoted an SM to DM. I became a DM trainer and trained 2 DM's, one "external" and one promoted. I gave out one more SM of the Quarter and I helped my SM's win a group Spirit of Starbucks award for community service. I mopped floors, took out trash, did lobby sweeps, and even cleaned drains - if that is what my team needed to be successful.

Then, on July 29th I was called into the office. I was one of 12 DM's laid off in my region. I wasn't given a reason. I had no corrective actions, no poor reviews (in fact I was told I was on track for an RD position in a year). My team loved me and I loved them. I was completely shocked.

That was 7 months ago. I have interviewed many times. Even though I have 10 years DM experience with outstanding companies and an amazing performance record before Starbucks, I keep hearing "Oh, we don't have good luck with Starbucks people. Sorry".

I am 2 months away from losing my car. I am 6 months away from losing my house. I don't have any living family I can move in with, so I don't know how long before I am in a homeless shelter (really).

So, all DM's are not the devil. All DM's are not performing badly. All DM's are not ruining Starbucks.

Please THINK about what you wish for and their consequences before you have such hateful desires.

[madison]

This latest babble from Shultz is comical. At the Leadership conference he said in his address that the "transformation is complete". How many more layoffs have happened since then? Myself and several of my team were laid off first thing Monday morning after receiving a meeting request from our boss at 6pm on Friday evening so that we could worry over it all weekend. There is very little respect within the organization anymore, regardless of what HS says. He doesn't have the slightest clue of what the field is like, and he doesn't care. To those of you left who are still passionate about what you do - be true to yourselves and protect what you can, but do not be fooled by corporate level pandering, and thanks for everything.
Onward....or whatever.

[BOSTON STARBUCKS REBEL]

729 I feel very sorry for what happened. However, most DM's are like the bold coffee, we just don't need you half of the time.

[Naptown Barista]

729changedmylife, thanks for keeping it real... sometimes we forget the impact.

[Venti Urnex Latte]

On the video, Howard says he serves instant VIA at his office and home, and nobody has said anything but good things about it.

Well, nobody served a cup of coffee by Howard is going to say to his face that it sucks. They might say it behind his back, but not to his face.

VIA might be good coffee, but the test of that is certainly not what people say to Howard when he serves it to them. So this is a dumb and misleading anecdote to use as an example of anything....except maybe as an example of people pandering to the boss.

[Darleen]

729changedmylife,
I am so sorry to hear your story. When I read things like this it really tears me up because of all the hard work and dedication you put in. I wish for you a new job that you can shine in, quickly. Try to stay positive, the retail/restaurant world needs more dedicated, hard working folks like you. I wish you well.

[Stressed Tech]

Glad to hear there wont be anymore layoffs. Tell that to the 12 Equipment Technicians in Mid-America who just found out today their jobs are being outsourced to a third party vendor. 530 stores will now deal with a non Starbucks technician to fix their brew and grind calls, as well as water filtration. This is a "pilot program" to test the waters to see if the they really need us techs anymore.
Stores will give feed back to SSC about the vendors performance. Please Op's Partners, hold these vendors accountable and fill out the surveys frequently, if you want to keep your beloved Sbux E-tech.
In my region we have been taking on more and more work from Contractor Vendors because their work quality is crap and costly to the store. This results in better quality work and zero cost to store (P&L).
I do caulking and sealing, plumbing, cabinet and fixture repair, water filtration, you name it.
All of this and I was only hired to be a Machinist working on brew and grind.
Help save your Techs!

[Coffeeguy]

Quote:
------------------
White-Knight you are absolutely right this is been going on for a while, so in order to reverse the balance you need to sabotage your Supervisor or SM and turn the tables on them...Let them be the ones taking the heat for all the mistakes, they should step up to the plate and take responsibility of how much of a terrible job they are doing.

Posted by: Blaze | March 04, 2009 at 04:57 AM
-----------------------

Blaze: This statement made me lose all respect for you. I work for Starbucks and I'm not a union guy, but I understand the appeal of unions and could see myself joining one if it ever came to my town. I could understand your pro-union statements and the need to form a team together but purposefully sabotaging your team is no way to build a productive work environment.

[Sorry]

Stressed Tech,

I heard about this today too. My heart goes out to the equipment techs who lost their jobs today and all the techs in other regions who are now waiting on the results of this test program to see if they will still have jobs.

[who says no more layoffs?]

Dear Sorry,

I am completely with you in my regrets to the techs. However, this is no surprise. They have been planning this for over 9 months. Unfortunately you were told this is a test, but it is not. It is the future. Word on the street is Florida is next

If you are a tech i wish you the best of luck but please, please please be out looking for jos now! control your future.

[roar]

The techs will all be gone within a year. Everything will be vended, and probably take several calls to actually repair anything. Expect many, many, many callbacks. Not to mention the mastrenas are not really a quality machine, and they make the parts out of cheaper and cheaper material every day, with no intention to actually improve them.
The pilot program in mid-america will be a complete disaster, and an even bigger disaster as the mastrenas age and scale up as no vendor would really care about maintaining them. Also, as many techs have experienced with vendors, they really have no idea at all what they're doing. But, as we all know, starbucks will pat themselves on the back and say "shucks, we did a swell job with that pilot program," and the thing will be implemented nationwide.
Ultimately, if the techs had been unionized years ago, they wouldn't be watching this happen. Additionally, they wouldn't have been forced to do the caulking, plumbing, drain-unclogging, cabinet-repair, and whatever other bs they were forced to do as of late to save money, without any increase in pay(or thanks) for doing so. This pilot program is the kind of thanks they get. Ethics and integrity? Ha!
Fortunately, the technicians shouldn't have difficulty finding work, even in this environment, someone always needs something fixed, and I feel most will consider it a blessing to be let out of this place. Heck, a few may go to the vendors. Have fun telling customers you can't make a latte cause your machines are down!!!

[BOSTON STARBUCKS REBEL]

The greatest leader forgets himself
And attends to the development of others.
Good leaders support excellent workers.
Great leaders support the bottom ten percent.
Great leaders know that
The diamond in the rough
Is always found “in the rough.”

Lao Tzu

Is Howard Schultz a servant leader?
After careful discussion and reflection about the actions Howard Schultz, the chairman, president, and CEO of Starbucks Coffee. We have come to ask ourselves some important questions over the last year. The so-called transformational agenda as implemented under the leadership of Mr. Schultz was done at a time of unprecedented economic difficulty, which has severely strained the global financial markets. Has Mr. Schultz and the senior leadership have enabled Starbucks to lead in this environment or have we fallen behind? Is Starbucks stuck in a quagmire of hypocrisy and if so what is the root cause? Finally, what is the most important goal of Starbucks at this time, remaining true to its Mission Statement and Guiding Principles even when the storm is raging around us or taking the easy way out?
At a time like this many of us ask the question. Should we do the right thing or the smart thing? An ethical problem posed by this question is like, if we had to choose between saving our mother’s life or a hundred people’s lives, what is the right thing to do? Is it wrong to sacrifice innocent, hardworking people in order to attain a goal, in this case profitability? Mother Teresa one time said that she did not pray to be successful but to be faithful. Has Mr. Schultz and the senior leadership been faithful to the partners at Starbucks?
A servant leader is one who listens to others and wishes to develop them beyond what they are. Mr. Schultz said that the greatest resource at Starbucks was the humanity of Starbucks. A good servant leader truly understands that he is a steward, unlike Denethor who became so corrupted and bent on his quest for power. No, a servant leader is the one who defends his flock.
In the Gospel according to St. John:
I am the good shepherd. The good shepherd lays down his life for the sheep.
I am the good shepherd; I know my sheep and my sheep know me—just as the Father knows me and I know the Father—and I lay down my life for the sheep.
Is Howard Schultz a servant leadership or has he sold out Starbucks for 30 pieces of silver?

[blended berry chai brain]

so what happens when we really need someone. is that why it took so long for us to get the new machines in? i have an issue with out sourcing all the way around but then this is not our game playing, we are just those little magnet men running around the field doing what we are told. this company's future is not in our hands so all we can do is go to work and try and survive the fallout. so long to all the techs that are looking for work. it is sad that this story about howard went from the question of layoffs straight to the via program. bait and switch works well when you REALLY don't want to talk about something, good job mr schultz!

[MrFixit]

Actually, Store Development announced yesterday that there is a chance that the company will outsource all brewing and grinding repairs to a third party vendor, and thus the technicians and those who manage them will probably not see 2010 with Starbucks. Have fun paying those R&M bills, Store Managers.

[shiftspouse]

No layoffs.....right! They are just not calling them layoffs! They take you in the office, have have asset management give you a 40 minute pop quiz on every policy you should have ever learned and if you get any answer wrong....well then that is the reason they fire you. No warning, no write up. DM did it to 3 different shifts at my wife's store in Denver. They also make you sign a statement that you will not talk about the conversation to asset management or they will keep your last paycheck. SHADY!

[Shifty Stuporvisor]

729changedmylife, you sound very much like my former DM, one of the only good DMs I ever had. Even if you're not the person I'm thinking of, my heart goes out to you.

[BOSTON STARBUCKS REBEL]

http://www.bloggingstocks.com/2009/03/04/starbucks-3-95-breakfast-brand-new-day/

Look I got on the Internet again.
And 729, maybe you are like BOLD coffee. Starbucks always get rid of whats good for the Company and keeps the mediocrities around for some reason.

[seen it all happen before]

shiftspouse- the worst part of that is that here in texas, because it is an "at will" state so that means that any employer can fire you without cause and you can quit without notice and there is no recoarse. you can be the best employee around but if someone doesn't like you then they can fire you for no reason at all. this is one reason i don't like living here. the march 18th stockholders meeting should bring another massive conference call on the 19th to tell the sm's to fire more people. when the corporate stores get down to where one person is working alone how do you think the wait times will be then? i can see it now, ring one order and then make the drinks while twenty people stand in line(if they stay in line and don't leave). and make sure you smile and talk to each customer and provide that "third place". happy happy joy joy!

[Sneaky]

Ah yes, At Will or the Doctrine of Employment at Will. It states that in the absence of a collective bargaining agreement (a Union) an employer can fire an employee for any reason, no reason or even an unfair reason as long as it os not illegal (like I'm firing you beacuse you are a women).

Actually EVERY state in the nation upholds this doctrine. The only execption is Montana. This is the only state that requires "cause" to terminate.

Otherwise, we are all on our own in any state we work in.

[Venti Urnex Latte]

I totally love our tech! He shows me how to fix things and clean things. He knows stuff about the machines that nobody else knows. It sucks that he might not be around so long.

[Trish]

Doesn't closing a store count as a layoff?? Because they are closing the Gulf Shores,Alabama Store at Hwy59&Co.Rd 4.So isn't that people out of work ...sounds like layoff to me.Oh by the way this happens tomorrow Saturday 3/8/09

[TNT]

729:

I had a DM like you except he moved up through the ranks. He was a great man and sounds a lot like you. He got laid off around the same time you did. This company has lost it's frigging mind. Keeping bad DM's and getting rid of good ones seems to be the usual MO. I don't understand it, but I know that this is one reason the company is having so much trouble. We have more than a bad economy to get through, we have stupid senior managemant to get rid of. Unfortunately the stupid ones seem to be the only ones left.

Good luck to you and I hope you find something soon. I really wish you and my former DM were still part of this company (the way the company used to be...with good morals, values, and principles).

[pouter@aol.com]

Yeah, right. Just like there were n more store closings "planned" after the first 100, until the next 600 store closings were anoouned. Then they REALLY meant that no more store closings were "planned," until they announced closing the NEXT 300.

Pretty soon, it won't even be news that Starbucks is laying off people and closing stores. The news will be soon that "Starbucks plans to keep open 5 stores in State X"