Schultz says job cuts, store closures "will ultimately make us a much stronger company"

Howard Schultz adds, though, that they're "painful and difficult" now. He says closing the Australian stores was necessary because the market had high rent and expensive labor. Back in the US, he wants to do more with the Starbucks Card. "Unlike a fast-food restaurant or a quick-service restaurant, we don't want to get into the game of happy meals and deep discounts," he says. "The Starbucks Card is the perfect place" to build on the company's brand in new ways." (Read the Seattle Times story) || More quotes from Schultz)

Comments

[STARBUCKS GOSSIP WEBMASTER]

Remember that the name of the person who writes the comment appears BELOW that comment. (It's a little confusing with the new design.)

[seventysix [76]]

Thanks for the new website design, webmaster. Looks great!

[Koolaid Stained]

Is not a $2 cold drink after 2pm a 'deep discount'?

[Cut Out The Heart]

What I love about Cowards quote regarding fast food restaurants is that the way he had his folks treat awesome partners is even beneath fast food restaurants. I know he bristles at being compared to fast food but guess what Coward, you became more like fast food after Tuesday. The funny thing is, many fast food companies treat their long term dedicated employees much better. They get the value that those people bring to the company. Get over yourself Coward Schultz, nobody is buying your rhetoric any more.

Just so everyone knows, I am not bashing Coward because he has to make difficult decisions, that is part of the job. My issue is that he is doing so with a callousness, and if you listened to the earnings call yesterday, a sarcasm that is unhealthy and unfair.

[Cut Out The Heart]

Koolaid Stained - great point. Just another example of the double speak coming from the once vaunted leader. How sad.

[Westcoast Barista]

"Unlike a fast-food restaurant or a quick-service restaurant, we don't want to get into the game of happy meals and deep discounts," he says.

I'm still rather confused by Howard's assertion. By my calculation:
Hot Breakfast Sandwich + Coffee - 5 minutes + Drive Thru = FAST FOOD

Granted we do attempt, and for the most part deliver on the "3rd Place" concept, customers who utilize the ever-increasing DT's want their food and bev and want it QUICKLY! IMHO, Sbux has been completely present in the "fast food" market ever since early this decade when every second or third store developed had the DT component.

[Jeff]

If it wasn't meant to be fast food, there wouldn't be guidelines for how long it should take from taking the order until the product is in the customer's hands, i.e., under three minutes. Additionally, I believe there is a guideline for how long the wait should be at the window once the customer arrives there and has paid.

Have to agree with Westcoast Barista on this one - that certainly qualifies as "fast food" type environment regardless of the quality of said food and beverage.

[Pat Nerr]

"When Apple was on its heels, which was not that long ago... the bloom was off the rose, and people wrote Apple off. Then a couple years later, they're in a new business that no one ever predicted, and it has a halo on the entire company."

Like a cup of coffee (however good) can even be compared to an iPod. Wishful thinking Howie... You're no Jobs just cuz people think you're sick.

Can someone please tell Howie that he needs to wake up... cuz he's not listening to employees, Wall St., customers and anyone else that matters. You were successful Howie cuz you made something new in 87... Find a buyer, retire and do a little bike touring. That turkey is done

[sbuxgal]

seventysix, Starbucks will still make a profit not as big but still profit. iced grande vanilla latte costs .32 cents for the drink, cup and all.

[cupajoe]

To Pat Nerr,

Everyone seems to think you are the one with all the inside scoop. You seem to me to be disgruntled and unhappy. If you didn't care anymore, you wouldn't be visiting this website and you would have just moved on. But since you haven't, you must be gone because you were expendable.

[Jim C]

1) The Tech dude with the new Ferrari car at SSC got the boot back to Italy (after 1 month on the job)

2) Stock was flat today. And this was after the best news the company could give for now (we lost money, but it was because we are closing stores, and it is the economy... blah.)

3) The economy is not magically going to pick up by next quarter for Starbucks, which means more cuts to cover the losses.

4) Don't you wish they were still reporting same store comps? They would be el-stinko right now.

5) "Green" stores, "Healthy" food, and SVP's reporting to SVP's (check out the new org. chart for Marketing, sheesh!) are not going to get us out of this rut.

6) A reverse stock-split should be in the works to stave off a takeover.

7) Instant coffee is not going to solve this problem.

[Star$$$$$$$$$$$$$$$$$$]

$TARBUCK$ = THE HUMMER! (Neither will ever be cool or back in style)
Howard, just ask your "buddy" Bono.

[hugs&mugs]

Stop bringing in people with no passion for coffee, or even a vested interest in Starbucks, to be a part of the leadership team (store managers, district managers etc.). I've met great partners that do not even drink coffee, and that's fine, but when there are people (management specifically) brought on with the company who do not uphold the guiding principles we won't have the strength our company needs right now and in the future.

[barista]

Who ever thought it would be a good idea to open so many stores in the first place? Aside from that, it IS devastating to all of the employees involved. What else is devastating, is that for those of us that DO care about working for a good company with good values, and then suddenly, stores with coffee-house ambiance and character are being closed down so two more drive through stores can open in the same city. (They're still opening new stores daily, by the way). Soooo, in my opinion, a good company that respects the environment takes a break from constructing more new stores that encourage people to keep driving, driving, driving, using more materials, and cheapening the experience of a great product.

anyone know what the severance package was for DM and RD positions?

[espressoblend]

Two things:

6) A reverse stock-split should be in the works to stave off a takeover.

This has no effect. My percentage of interest in the company would remain the same, regardless if I have 10 shares of 100 shares total at $10 or 5 shares of 50 shares at $20.

Second:

Stop bringing in people with no passion for coffee, or even a vested interest in Starbucks, to be a part of the leadership team (store managers, district managers etc.). I've met great partners that do not even drink coffee, and that's fine, but when there are people (management specifically) brought on with the company who do not uphold the guiding principles we won't have the strength our company needs right now and in the future.

Posted by: hugs&mugs | July 31, 2008 at 08:06 PM

I think that it's just not the new people that they're bringing in. I don't think Howard's even following the "guiding principles" as they're a joke anyway. Just a way to bring in the hippies... It comes down the business, anyway.

[Sue De Nimes]

I have yet to hear better answers for our current situation than Howard's. That's what it comes down to, for me. Much of the griping seems personal, and beside the point. We are in a serious economic downturn, one which was not well anticipated, and closing stores, consolidating districts and shaking up management all seem like worthwhile steps (and I disagree with the notion that Q4 will require massive, substantial rejiggering; additional cost cutting, if he does it, will probably be more small focus).

(At least, barring economic disaster.)

I tend to think "stock buyback" may be the next order of business, to effect, as noted above, a less hospitable approach to takeovers. And we probably all need to wait and see what fall's food and beverage mix is - at least where I am, Vivanno is turning out to be a pleasant success, even if I hate the stuff (though Soy apparently improves the flavor...as does CBB instead of milk). :)

And just to offer one other perspective: given the reported loss this quarter, I was struck by the fact that our stock stayed flat, rather than fell; that alone suggests to me that the decisions to close stores and streamline management have at least bought Howard some time to show that cost cutting, and product mix, can stave off further losses.

[SoooooDone]

Cupajoe -

In reference to your comment on Pat Nerr...it is the fact that we are not aloud to disagree and speak our mind that has driven us to where we are today and to the disgruntledness that you point out. If we had the ability to voice our thoughts and concerns on the job without retribution maybe we could be more positive on this sight. However, since we cannot you get to read it.

Also, the fact that you think we do not care! What is the point! We still have a right to speak our mind! I do care and have agreed with a lot of what Pat Nerr says, and as far as I am concerned the fact that I do care enough to disagree says a lot.

I am sooooo tired of seeing or reading put down or dismissed because they disagree with the direction of our company! On this sight or on the job....I do my job well and take care of my partners. I don't negatively talk about the company to anyone but my peers...but for heavens sake we have to be able to talk about this someplace without being told we don't care! Because so we do....

[Highlighting the Naive]

Tell me how personal you think it is Sue when you are no longer getting a paycheck. I don't think anyone thinks that some of the actions are necessary (though a bit of an overaction based on your comment of a tough economic time - remember 16 cents per share)but the way people are being treated is the issue.

[espressoblend]

Tell me how personal you think it is Sue when you are no longer getting a paycheck. I don't think anyone thinks that some of the actions are necessary (though a bit of an overaction based on your comment of a tough economic time - remember 16 cents per share)but the way people are being treated is the issue.

Posted by: Highlighting the Naive | July 31, 2008 at 09:06 PM

Business is business. Don't take business personally. Let is roll off of your back.

When Sue is laid off and isn't tied to the company (working for) in anyway, creating the situation where she won't get paid, that's not personal. Not at all. That's business.

The minute you start taking business personally is the minute you've become unprofessional.

Yeah, layoffs suck, but that's business. While I may think that it's hilarious that Starbucks has these inane, lofty goals and mantras ("Guiding Principles") that are conveniently ignored in times like these, and, I might add, should never have been instituted as they go against the very nature of doing business professionally (though I do agree every business needs action plans and goals, but not stupid things regarding how people are to respect others -- that's just a duh!), it is business.

If people are generally treated in a manner that presents no legal liability (like discrimination, sexual harassment, etc), then they are being treated in an ethical, fair way. There are very clear rules detailing what fair treatment is, and SBUX has yet to violate those rules, regarding the way they've handled the layoffs. So people got laid off... big deal. It's happened to others before, is happening now to SBUX, and will happen tomorrow and next month and in twenty years. That's business.

Please learn to understand that, Highlighting the Naive, as until you do, it's you that truly comes off as naive.

[JMW]

Here's what I don't get about the Starbucks Card. Tell me if I'm missing something.

The Card is the perfect way to know the customer and improve the experience.

It should keep track of drinks I've ordered and when I go to the counter I should be able to hand it to a barista and automatically have it bring up my 'regular drink' and my first name. Then the barista says "I see Bob, would you like a soy vanilla latte today?"

No personal info stored but innocuous first name and apparent drink preferences. And every 'barista' in the company 'knows' me.

Instead it's just a silly discount card with incremental benefits.

I don't get it. Am I missing something here?

[Sue De Nimes]

HtN - I'm not hardened, or ignorant, of the pain of the people laid off. Like most baristas and shifts, I too feel a lot of sadness that stores will close and baristas will lose their jobs. I'm sad about people I know in facilities support and RMs and DMs getting downsized as well. But I think if the choice is carry nonperforming stores or close them... unfortunately, we probably have to close them.

I'm just a Shift; all I can do is go in to the store, guide my team, and give customers a good experience.

espressoblend, thanks for the support... I do disagree that some of the decisions violate Howard's stated mission for the company or our guiding principles; it's hard, I think, for the companies that came of age in the nineties, who emphasized team and "we're all in this together" approaches, to deal with downturns. "We're all in this together" sounds great during the good times. But I think the re-placement assistance, and severance packages suggest that the company is trying to handle separation with dignity and respect, as in all things.

Finally, I think JMW's point is dead on: the question for the company is how to make the Starbucks Card more of a tool that helps us, rather than the "gift card" it started out to be. I don't think the company realized just what it had in all those transactions until lately, and only now is trying to leverage that knowledge. I'd love it if the register popped up a name and a favorite drink for registered cardholders; I hope we can get there.

[norcalalmostexmanager]

Anyone remember that the Mission Statement and Guiding Principles were written by partners? Maybe it is time for a revamp!

[RogerTheBarista]

There is so much carping on this board over the layoffs. As an ex corporate exec from two Fortune 50 businesses, this is just the way things are done. How productive do you think people would have been if their manager had cozied up to them two weeks before and said "in two weeks time we are going to lay you off". That would have been great for business wouldn't it? Yes it sucks, yes it is difficult finding a new job, yes, health benefits are an issue etc. yes the guiding principles are not really being "followed", but a lot of people seem to be forgetting something....YOU chose to work for a large corporation and NOT a small, cozy, local coffee shop. If you think this is like MacDonalds or Burger King, then are you all going to go and work there seeing as it would be the same then? If you want to work for a small coffee shop that is intimate and embodies all the things that you were looking for, then head there. They might not give you health benefits, 401k, 30% discount, PartnerPerks, Employee help Lines...but you get what you choose.

Perhaps people should remember "Profitability is essential to our future success". Advance notice of layoffs isn't conducive to profitability. If you sign up to the guiding principles, then you sign up to them.

Not being nice to you would have been sending you a txt on friday evening after you had left, or firing you by email. That has happened to plenty of people in the past. This was handled, to my mind, in correct manner.

And if you have any kind of retirement plan that has a mutual fund, IRA, 401k etc...then chances are there might be an element of Starbucks stock inside it. So think on that....this is designed to help stock rise, so if you own it, quit your bitching. As a stockholder in any shape or form, you help dictate the actions by demanding performance from your stock.

As I said earlier, it hurts, it sucks, and people are going to have a hard time till they get back on their feet. I have been there twice before. I feel for all of you, but some people just need a reality check sometimes.

[Mark]

The guiding principles are absolutely important. It's one of the first things I talk about with prospective partners and new partners in first impressions. Personally, I joined Starbucks three years ago BECAUSE OF the guiding principles -- because as a manager it's how I wanted to practice business, and because as an employee I wanted to work for a company that respected me as a person. But I think people misconstrue the concept of respect. Respecting someone is not the same as liking/loving them, and that's where the lines get fuzzy and people's feelings get hurt. I've seen a lot of genuinely good people already leave the company. My good friend is losing her store and most recently, I lost my DM this past Tuesday, and she was the best manager I've ever had. But it's business, and what is happening is absolutely necessary. We could keep all of our partners and hope for the best, and then what? Be filing for bankruptcy in a year or two? Be the victim of a buyout? What do you think happens to our benefit package if we're bought out? As far as creating a great work environment for our partners, that's still up to the SMs. There's a lot going on with the company, but within my four walls nothing has changed. I still love my job, I love my partners, and I enjoy the interaction with my customers. If I happen to lose my job at some point, in the end my sadness would focus around missing those three things, nothing more. As far as my DM creating a great work environment for me? It's important, but not as important as being able to create it for my partners. As long as I'm allowed to do that, I'm good. As I've done all along, I'll continue to come in every day and give 100 percent. If that's good enough for my superiors, then I'll be with the company for a long time. If not, then I'll move on and do something else. Big deal. Because it's not personal, it's business.
The only thing I'm a little confused with is Howard's comments making it sound like the economy is solely to blame. While I do think it has the biggest impact right now, I do think there are improvements that still need to be made at the store level to make the partner and customer experience better. Unfortunately with all the cost-cutting labor seems to be farthest from the table right now but it's definitely still an issue. Speed of Service standards have become nearly impossible to maintain consistently with so much responsibility being added over the course of the past couple years with no additional labor added to help us get it done efficiently. Pay definitely needs to be addressed. In New Jersey, we are only 50 cents above minimum wage now for a starting barista, and we are losing many partners and having many really great prospects snub us because they can make more almost anywhere else and not have nearly as much responsibility. I am interested to see what fall has in store for beverages/food offerings and what new initiatives will be announced at leadership conference. As an SM, I am actually looking for change when I go to the leadership conference. A three-day cheerleading session is not what I'm going to be there for. Until then, whatever happens, happens. If I don't have any control over it, I'm not going to lose sleep over it either.

[20secondshotguy]

Hi Roger,

Actually, in the best of workplaces situations, folks are given notice of an impending layoff. Even though some people jump ship when they're given that notice it generally is a win-win for the company and the employee when that happens.

This is because the employee gets to prepare, knowing there is an end date to employment. On the company side, it allows for transition there also. Communication happens that otherwise might not and work is structured so that when the jobs end, everyone knows what was done and what needs to happen next.

When a layoff happens the way it just did, everyone has to scramble. Even where folks work as a team, the details are delegated out and those remaining have to work backwards to figure out what decisions were made, etc. Productivity is lost in the process and the work environment of the remaining employees also suffers, prolonging their transition as well.

You're right, the bottom line is the bottom line. It's just that other lines are important as well. Providing advance notice gives a quality of respect and dignity to work that unfortunately you don't find in many places. I for one, take Howard at his word that he wanted, no wants Starbucks to be different--better. Notice would also have enabled departing partners the opportunity to end well by wrapping up projects and tasks so that others could continue their good work. The internal customers, while not enthusiastic about losing good colleagues, would be better served and satisfied. It would have been harder to do, yes. The right things often are.

[PEET]

Anyone notice that Peet's is up $5/share today (25%) because of their earnings release yesterday? They made 7 million profit...hmmm....Hey Howard, see what happens when you focus on the basics?

[ItsAllGood]

I don't deny Peet's had an excellent quarter which is part of the reason their shares are up, but the main reason their stock price is up is because 25% of their shares were shorted. Most of it is short covering.

If you think that's bad, 47% of Green Mountain's shares are currently being shorted. People are just waiting for them to fall.

Starbucks on the other hand has a 7.2% short ratio.

Peets is up $2 since an April low and down $7 since a December high. Seems to me the shorts were correct in that the stock was overvalued.

[verticalphil]

I had a cup of el salvadore full city roast today at flat black in boston and i swear to god i don't care if i die tommorow. starbucks coffee company is not coming back for so many reasons, but the main one is that the coffee sucks. keep talking howard.

[bichywon]

funny how they aren't just giving employees the ax, but also the coffee line up. what is it, like 7 coffees they're cutting? yep, must be all about the coffee... er, the partners... er, maybe customers?... aw hell, the money. updating resume. for sure.

[sTAN]

One of the reasons Peet's is doing well is because they are not trying to push a coffee like that awful PPR Starbucks is trying to flush down their customers all day, every day, day after day after day.

[SEADAVE]

I can think of one way that Starbucks is not like a fast food/quick serve restaurant: I am yet to see a tip jar on the counter at McDonald's.

[kate]

The person responsible for vivano, serving oatmeal this september and trying european style hot choc AGAIN(chantico) this september should have been FIRED!!!!!

[STARBUCKS GOSSIP WEBMASTER]

Chantico is not coming back -- that rumor was knocked down here months ago. Please stop spreading it again.

[bdanfers]

Chantico per se is not coming back but there is a premium hot cocoa coming this fall. It has been very well received in some international markets.

[snagger]

I'm trying to provide some advice to a laid off worker concerning severance docs and the waiver of all rights.It seems like many of those cut at SSC were women who were generally older; is this the pattern and should legal representation be sought.Isn't there some federal law regarding 60 day notification in major companies?The severance package isn't much more than 60 days and they've stolen vacation that wasn't used. The health insurance ended in 2 days but 401(k) is not yet available for rollover.I wonder if Howard had the same poor investment choices provided by SBUX.A savings account would have been a better deal.Any one see any other issues?

[seventysix [76]]

bichywon,

We are phasing out four coffees (including Yukon and Decaf Shade Grown, don't remember the other two) and putting four coffees on a seasonal basis (Sulawesi, Sanani, Colombia, Brazil).

In all I think this is a smart decision as it will make the new autoshipment process easier.

seventysix [76]

[short drip]

I left in Spring 2007 voluntarily. My journey was from SM to RDO. I was delightfuly and humbley employed for over 9 years.

Although I left amid the pre-cursor and aura of these days, there is no way I could possibly look back and think of anything but hugely positve thoughts.

Starbucks was a gift. Whether it be for a week or 10 years, I was fortunate to be a part of something that made me a better person.

Starbucks invested in me the partner and me the person.

It's ideals and values were so high that the world was not ready for such a unique company.

Stop and take a moment to reflect, albeit among your personal uncertaintly and say this:

"Thank you Starbucks for positively impacting my life so that I could impact others. I appreciate that time in my life".

We were (and some of you still are) blessed.

As I used to say as a DM and RDO,

"Frap On"

[AdvanceNotice]

Advance notice would have been far better than the four weeks SSC and other regional partners wondered whether or not they were still going to have a job. Although some continued working, it lingered with everyone and many did the bare minimum as a result. Had there been advance notice, many people would have provided transition plans despite their layoff status. A large percentage of partners I work with would have done that because of their high level of professionalism. It wasn't handled correctly at all.

[Big Dave]

You should already be strong. After cutting through the propoganda,hype,brainwashing,and fluff that surrounds this company there really isn't much to them. I walked off the job at their (sic) ultra modern roasting plant in SC after coming to that reality. They offered one per cent match on four per cent for the first five years or so on their 401k plan.They offered me a chance to stand twelve and a half hour shifts on a concrete floor while operating their roasters from a tv tray near their four hundred plus degree machines.....Well actually they have built the plant and still don't know where the operators are supposed to operate it from.We were only told that we would not have an air conditioned control room like the other plants,but would be on the floor somewhere out there(Engineer scratches head). Then they started talking about us having to go down on the packline and stuff boxes while someone else watched the roaster.After factoring in the four hundred bucks a month I was shelling out for gas and the knowledge that there would be no overtime at this place.... I walked.Sure it paid a buck more on the hour than my old job,but no overtime,virtually no match on the 401k,off the wall gas bills going two counties over for some class in hand holding and feeling good about our auras....I simply got nauseated each morning when I started heading in the direction of the place. There are layers upon layers of salaried staff over top each hourly working person there. The managers have managers that manage the managers.What's pathetic is most of them just took off for an all exspense paid vacation to Italy while the company is laying off on this side of the pond.The icing on the cake was when they told us we would have to stop smoking by the end of the year because nicotine is a poison and they don't want it around. I told them I smoked in the interview then two weeks later after leaving my fairly decent old job they drop the NO SMOKING BOMB. What about all the people that smoked in their plants the last twenty years? Were they putting poison...nicotine in your aura? Even now as we speak....they are still smoking. Makes perfectly good sense to me to go to war with your employees when the company is in trouble and their stock is turning in to sawdust. They are outraged that they spent about ten thousand bucks on training and wages training me and I walked before the plant came online. They did send us to Nevada for two weeks and we trained on the roasters out there with some really great people,but hey!!!!! Start being honest for a change and upfront about the dirty side of the deal. We didn't just get out of high school last week. Stop treating your hourly plant workers like something you stepped in and got on your shoe. Stop this guiding principles and green book BS when it is blaringly obvious this is just a pathetic tool used by management to beat up the working folks. I look out a year and I don't want to be getting the sack after the election year in the midst of a long dead economy. Historically an election year is boom times economically and the next few years are bust. Think about it....at least if you lost your job the last week you can be posturing and find something before places like this come crumbling down.

[SbxSTV]

A stronger company would be going into the oatmeal business. That is not a euphamism. Oatmeal is coming this fall. I need help with my resume.

[sbxSTV]

I meant a stronger companywould NOT be going into the oatmeal business.

[truth]

Please don't spread rumors on this site. Please stick to gossip only.

Sincerely,
The Management

seventysix [76], the coffees being phased out are DCF breakfast, DCF komodo, DCF shade grown & sadly, yukon :(

[sbxSTV]

I meant a stronger companywould NOT be going into the oatmeal business.

[Ollie]

SBUX is in a worst case scenario situation. They have lost their "cool factor" among the urban dwellers many years ago, and now even the soccer moms are beginning to think they are "so over". Suburbanites are flocking to Dunkin' and other cheaper competitors in order to stretch a buck, and coffee snobs / lovers are going to REAL speciality coffee shops, like Peets. SBUX? No one's first choice.

I constantly said that SBUX was really just the 1990 - 2010 version of TCBY. Remember when "The Country's Best Yogurt" was everywhere? EVERYWHERE? With lines out the door each night? And now? I couldn't find one if I tried.

Remember HoJo's? Gone.

SBUX is going down that road.

[starry eyed barista]

So here's a thought... do you think that the company could have appropriated someone from the loss and recovery division to check ebay a couple of times a week... Has anyone ever noticed how items such as packages of mocha, boxes of frap mix and chai, and white mocha sauce (which we do not sell as retail) are readily available for purchase from obvious thieves within our company. How much of our loss do you figure could have been accounted for, or PROFITS gained for us, if we had someone checking out who these people are and stopping them from stealing our stuff? They had all these excess positions to lay off, but can't create a position for a loss recovery investigator to keep profits in excess of a million bucks or more per year going to theives and ebay. It seems like a worthy payrole position if you ask me. Just a thought though. Just look on ebay and search those products which we use but don't retail... watch for a month to see how bad it is...
and they wonder why we cant turn a meaningful profit.

Time to wake up and smell the coffee for everyone at SBUX.

Howard makes decisions based on his CEO role which is accountable to the stock holders not the employees. Sales are down for multiple retailers and so you downsize including making the ever hard decision to cut your staff. Sure he struggled with it because he has a heart and human side but make no bones about it he is fulfilling the guiding principle to be profitable as much as it hurts.

SBUX though struggling is uniquely positioned to turn it around. Drop the innovation or drastically cut it - get back to the basics focus on your core business slow down grow up. Make sure you cut costs operationally where possible but maintain your quality product and get back to making SBUX the cool 3rd place. To do this means changing the mindset - SBUX needs global leadership, cut the middle management which is fat lazy and tenured enough not to think fresh and do some freakin marketing.

If Matt Lauer constantly reports about the depressed economy on the Today Show and dropping your $4 latte to save some money - HELLO Starbucks your doing nothing to bust that perception and take a defensive position. You have affordable drip $1.70 thru the high end fu fu $4 latte's so push that to the public as their perception is your only serving up the high end....afterall if the consumer really wants coffee your core has it to offer your just not selling it that way.

Baristas et al...

If you take a few minutes to track economic cycles SBUX is right in the midst of the 7 yr pull back and it's a repeatable trend going back decades. Just so happens most of SBUX employees seemed ambivalent that anything could take them down. Time to get real and smell the coffee. The internet bubble burst after soaring, the housing market has not crumbled after soaring. Did you honestly think that is was going to be nothing but blue skies, high profits and double digit growth for eternity?

Let's not be naive here people. While it's a people friendly company afterall it's a large publically traded corporation whose stockholders insist on it being profitable.

If SBUX has 150K employees under the current economic conditions we have take a look in the mirror - your own personal spending is down as is everyone's and that means slower sales and change to stay profitable.

If anyone thinks this is the end I think your wrong. Sales are not going to pick up magically in one quarter to stave off more layoffs or changes. It's likely going to be dicey thru the end of next year especially as everyone is holding their breath on elections and what new fiscal policies the new administration will bring. Buckle up for a bumpy ride my opinion is there will be more closures on top of the 600 and my bet is two or three more layoffs over the next 12 months no different than any other retailer is facing.