"By far, this is the most angst-ridden decision we have made in my more than 25 years with Starbucks"

Starbucks CEO Howard Schultz's message to employees:

Dear Partners,

It has been almost six months since I returned as ceo. During this time, together, we have begun to transform the company by relentlessly focusing on our customers and the experiences they have in our stores. Espresso Excellence training, the successful launch and response to Pike Place Roast, Mystarbucksidea.com, the introduction of the state-of-the-art Mastrena espresso machine, the acquisition of Clover, our partnership with Conservation International, and the roll-out of the Starbucks rewards program are all examples of our commitment to our customer and elevating the Starbucks Experience.

This summer, beginning July 15, we will unveil healthy, good-for-you beverages, which are part of the Health and Wellness offerings at Starbucks. In addition, in Southern California, we will introduce a refreshing, indulgent cold iced beverage. Steeped in Italian heritage, it will be an exclusive product that our customers can only find at Starbucks. I can't tell you just how excited I am about our new innovations and programs and I believe you will be also.

For more than a year now, we have seen the adverse impact that a slower economy and dramatic decline in consumer confidence have had on our U.S. business. This has resulted in a drop in comparable store sales due to a reduction in customer traffic. The pressure on store unit economics has required us to take a serious look at our store portfolio. As a result, we must be more disciplined than ever in examining and evaluating our business.

After an extensive and rigorous review of our U.S. company-operated store portfolio, our executive and field leadership team, which included Operations, Store Development and Finance, has decided to close approximately 600 underperforming company-operated stores in the U.S. market, which includes our previously announced plans to close 100 stores.

Unfortunately, this hard, yet necessary decision will result in the elimination of many full-time and part-time retail positions. The majority of the store closures are anticipated to occur during the balance of FY08 and the first half of FY09. The exact timing of each store closure is dependent on third-party agreements and are, therefore, subject to change.  As always, we will treat our partners with respect and dignity, and in the spirit of transparency, we commit that all partners in our 7,200 plus company-operated stores will be informed as to their store's status (remaining open or closing) by mid-July.  We expect to place many of our affected partners in available positions at nearby Starbucks stores.  Those partners, who are not offered a comparable position within a reasonable distance from their current store location, will be offered a severance payment to aid their transition. These payments will be available to all full-time and part-time partners, and will be based on job level and current pay rate. Additionally, there is an ongoing review of our non-store organization, including both field and Starbucks Support Center resources.  Changes related to this review will be communicated to partners and implemented no later than August 1.

Throughout the history of our company, we have always aspired to put our people first. This makes our decision to close stores more difficult, as it disrupts the lives of our partners, who have worked so hard to deliver superior service to our customers. At the same time, we recognize that we must make decisions that will strengthen the U.S. store portfolio and enable us to enter fiscal 2009 focused on enhancing operating efficiency, improving customer satisfaction and ensuring long-term shareholder value for our partners and customers.

By far, this is the most angst-ridden decision we have made in my more than 25 years with Starbucks, but we realize that part of transforming a company is our ability to look forward, while pursuing innovation and reflecting, in many cases, with 20/20 hindsight, on the decisions that we made in the past, both good and bad. However, I strongly believe that our best days are ahead of us.

We believe that building an enduring great company requires the thoughtfulness and, at times, the courage to make some very tough, difficult decisions.  This is one of those times.  We have built one of the most recognized and respected brands in the world … the essence of which has grown out of the passion and character and integrity that is inherent in our partners. And I promise you that I understand the magnitude of closing so many stores and the emotional impact it will have on our partners.  I assure you that we have taken all of this into consideration in doing what is necessary to strengthen our company for today and the future.

As always, thank you for all you have done and continue to do for our company.

Onward,

Howard

Comments

[Pee]

Seriously, trolls, cut the crap. It's annoying.

"zomg howard blah blah blah" get over it. You just like complaining. Don't YOU have a job to attend to or did Howard take that one away, too?

[Lilith]

THANK YOU PAT NERR! That's exactly what he should've done.

[Melody]

[quote=patnerr]>>You could also turn in that big, fat, black Mercedes and ride your bike in since you're less than 7 miles from work.<<[/quote]

If Starbucks ever moves to that Pioneer Square location on 1st Ave South, (or close thereto), he could cut it down to 6 miles. LOL.

[Pat Nerr]

at least the 150 mil they're spending on building those fancy new digs in Pioneer Square can be sold or rented... The original price tag was 90 mil btw.

[Sbux is Racist]

Starbucks is opening drive-thrus in black neighborhoods because they are racist. They will close down their company-owned stores in black neighborhoods and let the licensed stores stay open (because they are ALL inside of grocery stores), because they are racist. They have no black board members, or senior management (firing Ken Lombard recently?) why? Racist.
It is time to boycott this honkey company. Power Up!

[LAStorePartner]

His hardest decision? Really? Wouldn't his hardest decision really be what car to drive in the morning, or what 20 million dollar hour to live in today? MyStarbucksidea.com is a friggin' joke, Pike Place Roast is a failure that is being pulled out of certain stores (soon to be all stores), the Sorbetto will fail (which will another painful decision when he gets rid of it), the Vivanno (sp?) heath and wellness smoothie will cause fruit fly populations in the stores to rise, and they will NOT give us any extra hours! What uncie howie should really be pained about is that we are asked to do more and more work, and we do not get any additional labor hours!
This sucks donkey balls!

[anon]

what is opening DT stores got to do with race? but i wouldnt want to work in a lobby store in the ghetto anyway. way to much of a safety issue. unfortunate but true. should stores stay open in the ghetto if they are not making money? im sure the average poor, uneducated black citizen isnt going to spring for the $4.50 rasberry mocha.and tips would probably suck. its a no brainer!

[Cali ASM]

Pike Place Roast is a failure that is being pulled out of certain stores (soon to be all stores),

Is this true?!?!?

[SpiceLux]

I don't see what the big deal is.

The $tarbuck$ 'partners' (snicker, partners my ass) can just go work another, close-by, independently owned coffee shop. That's where I'll be getting my coffee once they close.

Oh, wait.... $tarbuck$ put the indies around me out of business years ago.

My bad.

Oh well. See you at Dunkin!

[anon]

Look deeper into your Supply Chain Howard. I can almost guarantee you have huge potential for savings and efficiencies (and a host of other positive gains)in that arena. A big task, but if your committed to change then do it now.

[Nomorekoolaid]

No doubt this was hard for Howard, but not so sure that this emotion will be GENUINE for those who will need to execute the marching orders (sadly). Afterall, those carrying them out will unlikely be impacted themselves.

[Jake]

The stores should have been told and then there should have been a press release. They've already decided which stores will be closed. This does horrible things for employee morale. You don't make an announcement and let people stress and worry for two weeks before you give out details. This is extremely poor leadership, and it seems that it has been done without a hint of foresight and planning, much like every decision since Schultz has been back.

[atownsbuxrules]

I am so disappointed in this company.

[TRIPLESHOTOFSMILE]

My stores closing....blah....

[Barista Bob]

Pat Nerr has it right. Howard should forgo his salary and bonus (although giving a bonus would be ridiculous). Arnold doesn't take a salary, and he runs the entire State of California!

[Chuck]

Howard needs to take the blinders off! I can tell you first hand what is making Starbucks die. Every store in the Western New York area is BARE! There is nothing to represent the cozy experience anymore. Bare sales floor, nothing more than a few (I emphasize FEW) coffee cups and some beans to buy. True, SBUX is about coffee and fancy coffee drinks but there are many other reasons to go there. People collect seasonal merchandise which is now gone. Bearista Bears are gone. I found Easter bears on Ebay, apparently they were only marketed in Taiwan. Maybe I'm wrong but that was my understanding. SBUX public relations and customer service are way off base. mystarbucksidea.com and the customer satisfaction survey you get from the cash register are geared with multiple choice questions so that SBUX hears what they WANT to hear. No room for comments or questions that pertain to the customer. Any time an actual email is sent to the company the only response ever received is an automated "we got your email and it will go to someone who give a crap" type thing. If Howard gave a crap about the customer then any issue would be addressed and replied to in order of importance. If someone complains about a drink and how crappy it was then send them a $5 card to try another one on SBUX. Common sense folks!

Do I sound bitter..YES I AM!! My local SBUX is closing. I emailed them weekly trying to get through to someone to get one built here. Now after three or four years it's closing. There is not another store within 1 1/2 hours from here! "MY" store is packed almost all the time. Drive through is lined with cars. Makes no sense at all! A store an hour away from me that has been there for years just got a new one 1/4 mile away from it last year. Now they are both staying open that close to each other. 1 1/2 hours the other way from me same thing. Old store gets a new one 1/4 mile away and they are both staying open too! Lockport store is the only one filling the gap between Buffalo and Rochester but Howard wants to close it! I'm furious, been betrayed! This whole secret thing is a load of crap. Bet Howard hasn't even looked at the numbers. Maybe getting SBUX on the right track again involves getting rid of people in the company making stupid decisions. Let's do that first before we start destroying people's lives!

[me]

I got out, and I could never be happier. I work for a company now where my CEO actually knows who I am, by name, AND face.
Schultz is such a plastic fake.
Instead of "onward" he should say "downward"

[former manager]

I was let go three months ago after ten and a half years with Starbucks. In response, I sent the following email to Howard Schultz addressing some concerns I had. As Howard never replied (he answers every email?) I thought I would post it here. Starbucks will thrive or lessen based upon its ability to connect partners and guests through pure coffee passion. Sadly, this passion is no longer reflected in the great mass of middle management largely running the company, which has become far less entrepreneurial and far more bureaucratic as the years have passed. As a result, Starbucks is marginalizing - or even removing - the very partners it should be reaching out to to help re-establish the brand. Original message follows:

Howard,
From August of 1997 until this Tuesday past I was proud to be a Starbucks partner. In those ten plus years as a partner, and as a store manager for the last nine years, I have been a tireless advocate for and relentless pursuer of Starbucks quality standards. I love coffee. I remember the coffee press of Starbucks Sumatra I enjoyed with my brother the morning before my first interview with the company; I remember the first time I tried Arabian Mocha Java, Ethiopia Harrar, and Aged Sumatra, back when quantities were sufficient to take it as a partner markout; I remember almost falling out of my chair when I first tried the coffee that today remains my all time favorite: Sumatra Lintong Lake Tawar. No one else seemed as swept up by the coffee as I, but I recall its depth, its richness, and the intense notes of tobacco. I was unable at that moment to focus on anything other than the coffee.

I was blessed when I first came to Starbucks to have been hired by and to have received my initial coffee education from Firat Taydas, now of the Coffee Department at the SSC, but then a store manager in the newly opened Phoenix market. His passion for all things Starbucks was inspiring, and I adopted that passion as my own. In the years that followed I developed a reputation amongst my partners and peers for being the one who really loved coffee. One manager always called me the "coffee guy" as he never saw me without a cup in my hand. Likewise, I have a loyal following of customers, some stretching back to my earliest days with Starbucks. Needless to say, I, more than anyone else I know locally, have been thrilled and inspired to see the company reaffirming its commitment to its core product, its commitment to freshness and standards, its recognition that the quality of Starbucks' coffee is unmatched in the marketplace and that all partners should be proud of that fact. Indeed, all partners must be proud of that quality if Starbucks is to rebuild the business into a sustainable, growing enterprise dominant in its market.

Thus it troubles me that this past Tuesday I was fired by a district manager who has, in nearly two years, never come to my store dressed as one of my partners; never worked side by side with any of my team let alone myself (other than to refill the pastry case, which is about as far as she could get behind the counter in heels); never made a drink or shared a coffee press with any of my guests; never, in fact, even deigned to park where store partners park, choosing instead to always park in spots intended for customers. My dismissal has been received with total confusion and disbelief on the part of the store partners. Given my reputation for both quality of product and operations, my peers are dumbfounded; I have been a primary resource for many. Indeed, I worked with many of them before they were store managers and assistant managers.

I am not, of course, infallible; indeed, my faults are many, and well known to myself. Primary among them, it seems, is an inability to consistently feed the bureaucracy that has emerged above the store level. I do not dismiss the need for forms and systems, but those who have a passion for such enterprises unto themselves are unlikely to inspire a passion for something so pure and organic as a great cup of coffee. Perhaps those systems are inevitable and even inviolable in a large company, in which case my time has past anyway. More sinister is the suggestion put forward by many in the last couple of days that in a time of economic downturn, a partner of ten years was simply too expensive to keep on the books. Perhaps that is true of the short term. In the long term, however, as regards my knowledge, passion, and commitment, my loss will be far costlier.

And so I end, saddened as a former partner, and concerned as a shareholder. The programs which have been introduced recently are marvelous: Espresso Excellence and Daily Brew truly point the way towards reconnecting Starbucks' future with its essential past. The Mastrena and Clover systems are technological marvels. However, no program or machine can ever replace visceral, human passion, or how that passion in one can serve to move many. The way 'onward' will be built primarily on that passion, or it will not be built at all.

Thank you for your attention.

[SoCalRocks!]

Former manager- why were you fired? You a hell of a writer, but I'm still confused on why you were actually fired. Did the DM and/or HR provide you with an explanation?

[z12]

Wow, Former Manager, your post really moved me. Your passion came right off the web page. You have a gift not only of a passion for coffee, but also of the written word. Starbucks loss of such an asset as yourself will be the huge gain of your next employer (or maybe your own coffee house? :))

All the best to you and thanks for sharing your thoughts.

[dmanagerla(former)]

From one former manager to the next, your post sounds so familiar. Yesterday, I left Starbucks after 14 years of mostly great times.
With the positive reviews of 10 of my 11 former DMs, the fact that my 11th DM was incompetent doesn't seem to matter to Starbucks. I am not quite as eloquent as you, hopefully that will come in time. I just wanted to wish you the best of luck!
d.

[Melody]

Former Manager,
That was an amazing letter/email to send to Howard. I am convinced that he reads the overwheming majority of the email that he gets, but the percentage he replies back to, is actually quite small. At least that's my guess.

I HOPE you get a response from Howard. That email is right on the money as to what's happening at Starbucks. So much of what I hear on this site deals with problems at the DM level of management. I'm sure that there are good DMs out there, but it seems like revamping is really needed in that area of management.

I wish you the best. I only wish I could have visited your store when you were in it. :(

Melody

[Cali ASM]

Oh my god Former Manager that e-mail was awesome. I would absolutely love to sign my name to it. I have been with company for just over four years and unfortunately I feel the same way as you. I can't stand the bureaucracy of middle management (DM's and RM's, etc.) and especially all of the useless paperwork (Ecosure audits, Rapid critical checklists, latte tests).

All of this is getting in the way of what I just want to do: run my store, period. I know how to do it, I want to do, I have my own methods, skills, and organizational tools to do it. I don't need a DM or RD to tell me what I'm supposed to do or how to do it. Isn't this why I'm a manager. I can think for myself, I can read, I can speak, I am not a child. I don't need daddy holding my hand every minute of every single day.

I don't need a timer to tell me a spin needs to be done and I don't need a book of checklists to tell me what needs to be done, fixed, improved, etc.

And what is up with DM's and RD's who have never worked in a Starbucks store before anyways?!?! And somehow they know better than a store manager, especially a manager who started out as a "lowly" barista!!!!

I cannot believe that a partner such as yourself was let go. This makes me so angry especially since I work with an SM (I'm an ASM) and a DM who don't have a clue about anything. Point being that they keep nitwits such as these and get rid of good partners such as yourself (of course I've never met you before so this is based on your post).

I have had it with this company. I never expect special treatment since this is a corporation we are talking about here, but I deserve better than the way my DM treats me and the way my SM runs my store. I am currently looking for another job so, as far as I'm concerned, that makes two good partners (and managers) that Sbux loses out on.

[Pat Nerr]

Former Manager... that's just mortifying. I hope Uncle Howie reads your letter and responds appropriately...