Starbucks releases its quarterly results on Wednesday. It has to try to appease shareholders/analysts, and nothing does that like layoffs and other cuts. What will happen on Tuesday?
July 29, 2008
Starbucks releases its quarterly results on Wednesday. It has to try to appease shareholders/analysts, and nothing does that like layoffs and other cuts. What will happen on Tuesday?
As an SSC partner with no idea of their (or anybody else's) status tomorrow, all I can do is say my thoughts are with each and every one of my partners who has made this an incredible company to be a part of. The people of this company are the ones who have always made every day a treat.
I miss my store days and hope I've done right by all of you store partners who post and lurk here. You are the heart and soul of this company, and I sincerely thank you for everything you continue to do to deliver the Starbucks Experience to our customers daily. Yours is the hardest job in the company, and you do it better than anyone else day in and day out.
So thanks for all the Green Apron Cards, Bravo Awards, spontaneous french presses, creative coffee tastings, morning espresso runs, trips to the doppio, meetings on the porch, sardine jokes in the tower elevators... and so much more. Even if I'm not on the list, having to come back to the office on Wednesday and see the empty desks is something I dread.
My thoughts are with everyone out there who's in the same boat I am, as well as those of you who already know your fate. Best of luck to each and every one of you.
Posted by: Pins_and_Needles | July 28, 2008 at 09:21 PM
It already happened over here in Hawaii. Four people including two very well respected dm's and two long time partners. We in the stores are watching Starbucks Hawaii implode from within. We should have stayed in International as a license operator. More fun more profits and more of the true Starbucks culture. Current Hawaii leadership is searching for a clue in a dark room.
Posted by: Aloha means goodbye | July 28, 2008 at 09:22 PM
yikes...makes me remember how weird i thought it was when my amazing DM told me this morning that he had to reschedule our meeting tomorrow because he had an impromptu meeting with the RDO first thing in the morning...we already knew his job was at stake because of the closures limiting his store portfolio, crossing my fingers for him
Posted by: yikes | July 28, 2008 at 09:27 PM
Last week there were already eliminations of entire groups, all mid-level PRA people were let go in the US.
Posted by: BlackTuesdayAlreadyHitting | July 28, 2008 at 09:28 PM
My DM let out that he would be in a meeting tomorrow morning also...was very distracted during our ops. excellence today...
Good luck to him and all partners facing elimination tomorrow...I am a store manager and while I feel relatively safe at the moment, there is no real job security in watching the company you work for fail...
Posted by: ThenWeCameToTheEnd | July 28, 2008 at 09:40 PM
Were the PRA layoffs for Public Relations or Partner Resources?
Posted by: Running on Empty | July 28, 2008 at 09:46 PM
I heard partner resources, my areas manager was just laid off
Posted by: yikes | July 28, 2008 at 09:50 PM
I was one of the first to be laid off in Hawaii,not part of this lay off that happened today. I wish those who lost their jobs today the best, since this happened to me a couple of months ago, I can say there is life after Starbucks. I wish everyone the best and will be praying for those who do not know their fate yet. I truly enjoyed working with everyone at Starbucks here in Hawaii, and miss many of the partners. The current leadership is grasping at straws trying to figure how to pull Starbucks out of the hole and continues to pull further away from what made Starbucks great to begin with.
Posted by: graspingatstraws | July 28, 2008 at 09:51 PM
As a customer, I hope that the lazy higher-ups in Miami get their asses canned right down to the store managers. I should just give up on SB here in the 305, but for some darn reason I keep giving SB the benefit of the doubt and hoping I see change. It just keeps getting worse. Almost anywhere else i've been in the USA, SB is consistently good. What is it here?
Posted by: FashionisSmashin | July 28, 2008 at 09:54 PM
Well many DMs and 1 RD were told that their positions were no longer there! The selected partners do have a choice to take another position in the company or to take a severance package. The company is making the right moves to keep its head above water! Those who are still employed should be thankful and should keep working hard to make sure this company is successful
Posted by: secure SM | July 28, 2008 at 09:56 PM
Which RDO?
Posted by: nonamejustquestions | July 28, 2008 at 10:09 PM
I often read this site, but have never posted here. Today is a new day. I received an outlook meeting this evening with my director first thing tomorrow (black Tuesday?) I have worked at Starbucks for 12 years, moving my way up from barista over the years. I am appalled and saddened by the lack of respect I have been given, and it saddens me to know that tomorrow is my final day. It's like getting a break up email or text message, just tacky very tacky. It is a sinking ship, going down... down... down...
Posted by: Job No More | July 28, 2008 at 10:11 PM
Even with the new look of this site, it's still confusing at first glance to tell which name goes with which post.
Anyway, pins and needles, I heard that the layoffs in the field are tomorrow, but the SSC layoffs won't happen until Friday. Not sure if it's accurate, that's just what I heard. You may be on pins and needles for a little bit longer.
Change is exciting though, so I'm ready for whatever happens.
Posted by: eleanor abernathy | July 28, 2008 at 10:12 PM
I have a feeling all ASM's will be cut. It's a support job that is supposed to be developed into a SM. SM's won't be needed to be grown into since there won't be many new stores.
Posted by: EV056016 | July 28, 2008 at 10:14 PM
I am an SSC partner. It is a common belief that there will be many layoffs at the SSC tomorrow.
Posted by: Running on Empty | July 28, 2008 at 10:16 PM
I was just laid off from the regional office, but to the best of my knowledge, ASMs are not being cut. Sbux recognizes that they need to have an ASM bench to backfill SMs. Very few (if any) of the stores being closed have ASMs. What is more likely that we will have a temporary influx of store managers, currently rated "CE" that will backfill stores through natural attrition. Sbux wants to retain quality talent and is willing to do what is takes to keep the high performing managers.
Posted by: caramel macchiato | July 28, 2008 at 10:25 PM
Why in this crazy little Starbucks world is no one bringing up the planned Management Conference in New Orleans??? 10.000 people from around the globe being treated to a 5 day conference in New Orleans!!! WAKE UP HOWARD!!! One hand we are closing stores and laying people off and on the other we are spending a ton of money on a "VACATION" for the others who keep the job?????????????????
Posted by: WHY??????????? | July 28, 2008 at 10:29 PM
"Running on Empty"--I believe PRA refers to Partner Resources Associate. The partner resources organization will get the least amount of triming as they never really large to begin with.
This current round of cuts is intended to create a more nimble organization. There are so many layers and facets that executing priorities was going to be difficult. Having as many regional offices as we had was totally unjustifiable. Closing those offices juxtaposed with store closures meant less or no need for RCs or PRAs. Most DMs and RDs will probably being officing out of their stores and homes.
Posted by: caramel macchiato | July 28, 2008 at 10:31 PM
In related news, a local biz paper came in my mailslot today and it seems Launi Skinner has a new job:
http://www.businessedge.ca/article.cfm/newsID/18324.cfm
(In case the link goes dead, she's about to be President of Vancouver, BC's 1-800-GOT-JUNK? )
My manager called up our region's recruiter the other day and found out he was being moved back into operations to be a store manager!
Cheers!
Posted by: TORONTOWYLD | July 28, 2008 at 10:34 PM
The best of luck to everyone at the SSC. I'd have to have some Kleenex at my desk if I were there. :(
I notice that there's no way with this new look at SG to roll your mouse over a name and see an email address. I sort've miss that feature. Also the old look was easier to read who posted what.
Posted by: Melody | July 28, 2008 at 10:35 PM
Thanks for the info eleanore, but I have it from good authority (people scheduling meetings, people with security connections, people who found out their fate through the grapevine a day too early) that tomorrow is D-Day. There's always an Open Forum with Howard following earnings releases, and with that being Wednesday he'll want to address the layoffs when he speaks to those who are left -- plus it will look better to Wall Street if the number of RIF is higher when we make announcements.
As for the Hawaii partners posting, I just have to say how much love and respect I have for the people your market. I've had a chance to work with HSC partners on a few occasions and they are some of the best people I've come to know in the company. Wonderful partners each and every one. Aloha, Mahalo for the update -- I'm sorry to hear about the lost partners. Graspingatstraws, I'm sorry to hear your story. Were you one of the immediate layoffs or did you get the "position eliminated at the end of FY08" treatment?
Posted by: Pins_and_Needles | July 28, 2008 at 10:38 PM
Anyone remember Muhammad Ali? He'd wave his left hand in the air and taunt the opponent, then whack the guy with the other fist?
You are focused on the wrong thing. Entirely. And you are gonna get hit upside the head.
The layoff news has been out there for weeks. And the stock still slides.
So they have to be cooking something else up.
Posted by: truth | July 28, 2008 at 10:38 PM
so an embarassing question. i was fired for stealing a giftcard which i have since personally apologized to my manager and paid restitution. i'm too embarrassed to ask my manager what he will say and i'm scared it's going to get digged up. i feel like i'll never get a job...
Posted by: eejit | July 28, 2008 at 10:42 PM
My store is turning into a shitty place to work! Very disorganized everyone scared our store will close. I guess I am done with Sbx good luck to everyone else! Time to get the F out of here!
Posted by: SD partner | July 28, 2008 at 10:45 PM
Thank you "WHY?????????" for bringing up the Leadership Conference. This really is ridiculous and needs to be eliminated from the equation. People are losing their jobs but the company is going to spend millions to have what is essentially a "vacation"??
ABSURD!
Posted by: What Happened To Starbucks | July 28, 2008 at 10:45 PM
Anyone know anything about the HFS contract change in the Seattle area? Is the new company cheaper or what do you know about them?
Posted by: HFS Question | July 28, 2008 at 10:49 PM
Okay, truth, I'll bite.
What do you speculate the other hand is doing?
Posted by: HolyCow! | July 28, 2008 at 10:49 PM
caramel macchiato or others that may know.
What Regional offices, in addition to KC, are on going into the grinder?
Posted by: Ugg.... | July 28, 2008 at 10:49 PM
Pins_and_Needles, no actually I was an over hire, promised my job was safe and then laid off. I loved my job, and the many people I worked with.Sooo much talent at Starbucks, any company would love to have anyone who does lose their job tomorrow, or has already. I hope the best for all of you! Keep your head up!
Posted by: graspingatstraws | July 28, 2008 at 10:50 PM
First, I disagree about the leadership conference. After all this, the remaining partners need a vacation. Right now every one is highly stressed and working in fear. Having this event will help bring everyone back together and on the same page. What we're witnessing now is the biggest and most difficult part of Howard's transformational agenda.
As for other offices, I believe St. Louis is going to be closed. Cincinnati and Minneapolis are also possibilities within the midwest. They already have significant offices in Chicago and Indianapolis. Paul Twohig stepped in the KC office this spring and realized what a waste of space and money it was. The previous RD (who left under suspicious circumstances to work at McDonalds) chose the office because it was minutes from his house, but close to nothing else. Now we've been saddled with a lease of a huge office space that was used by myself, the PRM, RD, and once or twice a week the DMs.
Anyone else have info about office closures?
Posted by: caramel macchiato | July 28, 2008 at 10:59 PM
@holy cow: I have no idea. All I know is you don't layoff people all week (which it appears they are doing) and then show up to the conference call with nothing but bad numbers.
The sharks wouldn't tolerate that.
Maybe the Boston Globe article has something to do with it. (Taking over some grocery store licenses in the NE.) Or maybe some of the other hints that others have made here have been true. There's been plenty getting repeated over and over.
Or maybe its a pre-emptive announcement to get ahead of the Aug 11 Nelson Peltz report.
Howard will get obliterated on the conference call if he doesnt come with something big. Remember the 7 transformational goals from the annual meeting? That type of thing.
He needs a message, rather than "oh, the economy is bad and we are laying people off."
If it were just the layoffs, they would have waited until the conference call.
Posted by: truth | July 28, 2008 at 10:59 PM
I am concerned about the buyout factor.
Look at Howard-- He just bought a new condo in New York. He invested about 25 million in Pink Berry. He has brought Pink Berry into Starbucks stores. Pink Berry wants to expand further in New York (hence the condo), and is no longer accepting franchise applications, yet it wants to expand...
Schultz sold the Sonics, perhaps he is leaving Seattle and leaving Starbucks behind...
Posted by: HFS Question | July 28, 2008 at 11:04 PM
I think it's great that they've brought back leadership conference ... atleast that is one thing from the transformational agenda that hasn't be fudged yet.
We aren't losing money people ... our stock is tanking, and we're doing what we can to curb that but we're still more then a profitable company ... when I was in the stores and store managers went to leadership conference i worked with a really great group of energized partners and we need to get back to energizing our store leadership and our store partners and making this third place
we need to get away from eliminating coffee options and creating brand diluting products
Posted by: buxy | July 28, 2008 at 11:05 PM
I posted in another thread that the layoffs started as early as last Thursday. A very close friend who is very respected by many in the organization and a tenured partner was let go uncerimoniously. Matter of fact the way people are being treated is as if they are criminals and committed a greivious act against the company. I would say that those in power, (Mr. Coles and all his buddies from International) are using standard Wall Street pleasing tactics. They seem to be using tactics made famous by Chainsaw Al Dunlap. If you don't know who he is, just Google the name and read the second paragraph in the Wikipedia posting about him.
This would be one thing if it were any other company but it is the highly touted place to work Starbucks. I expect that any business even Starbucks would take a downturn, it is part of the standard business life cycle. The difference for me is that one would expect such a great place to work to be the type of company that would go the extra mile for their employees. Well, the people that are making the decisions now are not doing so from what Starbucks has stood for but just like any other company.
Oh, seriously, sending out electronic invites for meetings to only those that are being let go. How bush league is that? Not something that a company that values people would do, that's for sure.
As I mentioned in a previous post to all the remaining employees, make sure that if Howard has an open forum, you ask him the tough questions. Don't softball him because you are afraid for your job. There is power in numbers. Make him, and more importantly the people executing this tactic accountable for their actions.
More to come...
Posted by: Cut Out the Heart | July 28, 2008 at 11:05 PM
I'm not sure if I am on the list yet or not, but there doesn't seem to be a lot of logic to why some of the decisions are being made. But the other aspect that is being overlooked some good business talent is quitting the company because of all the corporate uncertainty. I don't know of anyone at the SSC that is NOT looking for other work right now as a form of self preservation. The uncertainty is forcing people to become spooked and look elsewhere, even if their positions are business critical.
Posted by: Am I next? | July 28, 2008 at 11:06 PM
yeah it sure sounds like SSC hits are coming tomorrow - this just sucks
Posted by: bob T | July 28, 2008 at 11:08 PM
Hey Caramel,
One question, did you get an electronic invite to have a meeting tomorrow? If not, good luck to you in dealing with all the disengaged employees, New Orleans or no New Orleans. What has helped keep Starbucks a leader is their treatment of people. Well that is out the window. People are not going to give their discretionary time in the future because they are not going to see it paying off.
The savings of the cuts is going to cost more in the long run. Mark my words.
If you are safe, good luck to you and I hope it all works out. I am sure that the stock price will go up but Starbucks will never be the same. I see that they have become just like every other company. It is sad because it was Starbucks that gave the rest of us something to aspire too.
Posted by: Cut Out the Heart | July 28, 2008 at 11:13 PM
The condo in New York has freaked me out for a long time. You generally buy homes where you want to move to. Secretly, Howard hates Seattle.
I've been trying to figure out what HFS stands for. I thought from just various snippets of things online that Howard Schultz's middle initial was "D" -- or is it "F" ? Either way, neither are good on a report card.
Posted by: Melody | July 28, 2008 at 11:13 PM
caramel macchiato - Do you think that Indy is safe? It seems like such a waste of money. It's also kinda odd that they just had the RVP take over the Midwest as well as Mid-America, Chicago is his old home town. I heard rumors that Mid-America was being split apart, with all of the closings in Mid-America I can see it happening.
Posted by: Ugg.... | July 28, 2008 at 11:14 PM
HFS (hfsnorthamerica.com) is the company who used to delivery pastries and high volume skus to many Starbucks stores. As of next week, they are no longer the company, Gold Coast Foods is. Note the name-- Foods, not distrubition. Sounds more like a ownership then a delivery company.
Posted by: HFS Question | July 28, 2008 at 11:15 PM
Peltz has been plenty busy with Triarc/Wendy's and considering their lastest transactions, Howard is possibly looking solidly at the horizon.
When I first read your statement I thought it said, "...then show up at the conference call with nothing but bad manners."
I saw that Boston Globe article. Interesting that the stores are all union...
All of this uncertainty and turmoil has got to be hitting the stores (and, of course, the SSC) really hard for both partners and (the current) bottom line.
I've already heard (from a very good resource) that company/license will merge.
It's really going to be an interesting and tough week.
Posted by: HolyCow | July 28, 2008 at 11:18 PM
opps hfsjobs.com
Posted by: HFS Question | July 28, 2008 at 11:18 PM
"Cut Out the Heart"--I didn't receive an electronic invite, my boss wasn't like that. He called me on Friday on his way back home and told that we would be meeting on Monday. This morning he called me into his office. I have no bitterness whatsoever because he did demonstrate respect and dignity in how he handled everything.
"Ugg"--I agree with your analysis. Indy lost a good chunk of its staff in the first two job cuts this year. Additionally, the regional finance role was eliminated and all finance jobs went to the division level. One of the RDs out of Indy was let go last week. In short-it wouldn't surprise me to see them close Indy and move everything to Chicago. Indy was a weird choice to begin with for regional headquarters. I'm not sure why Rich chose it.
Posted by: caramel macchiato | July 28, 2008 at 11:21 PM
Melody, HFS stands for Havi Food Services. They work as the distributor that operators are regional distribution centers and ensures our everyday deliveries of pastries, milk, and high use inventory like espresso beans, vanilla syrup, and frappuccino mix to name a few.
Posted by: Trent | July 28, 2008 at 11:22 PM
Blessings to the proud fallen. Gimme a ring, we will shut hooverville down.
Posted by: Sean Oliver | July 28, 2008 at 11:23 PM
HFS = Havi Food Services... At leas it was when I was an SM. A consolidated distributor, but still had "food" in the name.
Posted by: a fellow partner | July 28, 2008 at 11:23 PM
does anybody have any more info on the P&AP partner who was fired for embezzling 500K from Starbucks but instead of pressing charges, the company buried it so it wouldn't make it's way into the press during these tough times to avoid the Rosemary Heinen repeat?
just wonderin' if anyone knows anything more
Posted by: Pat Nerr | July 28, 2008 at 11:24 PM
i love pat....he always gets us the good stuff.
Posted by: ex coffee wench | July 28, 2008 at 11:30 PM
CaramelMacchiato-
I asked in the other thread, but I don't think you saw it. Are these the office in Kansas at 129 and Foster that they are closing down? I got to travel to KS to go to RMT University once. They did seem overly huge. I met some really cool people in KC and remember meeting Brett, Doug, Mike, and Val. I hope they all survive this, they were all very cool to me.
Posted by: nonamejustquestions | July 28, 2008 at 11:31 PM
Carmel M - It was before Rich, The old Central North was a really weird geographical makeup that was part of it but at the time Indy was about the only place up there with any real concentration of stores and the only RD at the time in the Central North, in good standing, Rick Herbert. It was close to going to KC when Rich was hired though. long story.
Posted by: Ugg.... | July 28, 2008 at 11:31 PM