Starbucks fumbles again with the way it's handled store closings and layoffs

Talk about a company that's jerking around customers and employees! It makes the big store closings announcement, then leaves employees in the dark about whether they have jobs or not. On top of that, customers are wondering if their favorite Starbucks will remain open. (And all day, employees have to listen to: Is this store closing? Are you staying open?) WHAT STARBUCKS SHOULD HAVE DONE: Immediately release a list of stores that are going to be closed, and let employees know if they'll be laid off or possibly transferred. I called Starbucks PR this afternoon and asked when a list of the closed stores would be released. I haven't heard back. Apparently your July 4th weekend "Starbucks Experience" will be a continuation of this needless guessing game.

Here's a good STARBUCKS GOSSIP message board post from SEADAVE:
A few months ago Home Depot announced it was closing a number of underperforming stores. That very same day they released the list of stores. No rumors and speculation, just a clear message from the execs that these are the stores we are closing. Period. Once again the message from Starbucks' executive management is unclear and in my opinion the ensuing rumors, worries, and wild speculation is doing more harm to the company than good.

Comments

[Taylor]

There was a double shooting at a SBUX in Atlanta.

[stacy]

Starbucks wants the affected stores to be notified FIRST. If they didn't do that and the partners found out from the news, there would be an uproar about that. Any store that will be closing will have a month to get things in order. If your store ends up on the list, chances are you've known for some time now that your store is not reaching its goals. Partners are not completely in the dark. In my area, every one has already called out the one store for potential closure. From day one, not many believed that the location of that store was a wise decision and it's being proven day after day.

Starbucks will be trying to find positions at nearby stores for the affected partners. If they cannot find an open position or if a partner decides to sever ties with the company, they will be compensated. Customers can find another store, or if necessary another coffee shop, to frequent well within one month.

The media is blowing this way out of proportion. It doesn't matter what Starbucks does, the media finds a way to call them the "big bad corporation." It's funny how I have never heard of all the Home Depot closures but yet within 7 minutes, the Starbucks press release was across the country and we were getting phone calls from local reporters.

[grendel]

Because Starbucks was supposed to be better than a Home Depot. Starbucks was a leader within the industry (retail).

The media hyped Starbucks in the heyday. They have to distance themselves now. (Live by the sword, die by the sword)

[Westcoast Barista]

Actually Stacy, the media is NOT blowing this way out of proportion.

I agree that Starbucks should notify their affected stores before sending out the press release, but corporate jumped the gun by blanketly announcing that 600 yet-to-be-notified stores will be closing. And you think this WON'T pique media speculation?!?

This is bush league communications at its finest!

[Jim Lane]

Once again, you can see the lack of thought Schultz is giving anyone other than himself. Too bad one of the vics was not him. Then, perhaps under leadership that gets it, Starbucks might start back on the road to recovery. He is proving, once again, he does not have a single clue about the coffee market today.

[Transatlantic]

If people knew their store was closing weeks in advance, there would be a mass exodus from those stores and service would suffer.

[Danny]

Stacy, if you didn't hear about Home Depot closing less profitable stores, then you don't regularly pay attention to the news. It was all over the media.

[MichASM]

I agree. Starbucks management should have better handled their internal communication before publicly announcing the store closings. They could have maintained it on a need-to-know basis with management until the public announcement was made. I mean, the fact that my DMs and RDO were all caught off guard with this news speaks volumes.

[espressoblend]

Once again, you can see the lack of thought Schultz is giving anyone other than himself. Too bad one of the vics was not him. Then, perhaps under leadership that gets it, Starbucks might start back on the road to recovery. He is proving, once again, he does not have a single clue about the coffee market today.

Posted by: Jim Lane | Jul 3, 2008 1:44:27 PM

And this is true. Very true.

I totally agree that SBUX has handled this so totally wrong it's not only embarrassing, but also extremely hypocritical of the company. So much for their so-called high-and-mighty principles of respect and dignity. Ha! Then again, I don't know who would be more embarrassed here, the company or the "partners" who drank the kool-aid and totally lived by the "principles" SBUX allegedly perpetuated.

Frankly, it's whatever. From a business standpoint, this needed to happen. The store closings needed to happen. This company cannot keep going down this path. It will, in the long run, be a great move for the company.

Yet, I can see a huge issue for this company in regards to how they've handled this situation. So bad. A horrible PR move in the very least... Will only get worse when big media starts doing touchy-feely human interest stories about how big, bad SBUX not only left "partners" hanging IF they'd be let go, but did it for extended periods of time.

To all of you that will be let go: first, sorry to hear that. Second, the minute you find out, start looking for a new job. The new job will more than likely be a MILLION times better than your old job and you'll look back in six months to a year and be flabergasted that you (a)put up with SBUX and how poorly they treat their folks and (b)didn't do it sooner.

Good luck or, as Schultz says, "onward" to something much better than SBUX.

[grendel]

knee jerk reaction.
If you were a part of the 1st Howard stint, you would know that that is par for the course.

[really confused]

I have been with the company for a couple of years. I along with everyone else have been on pins and needles wondering about the fate of my store. While on the internet today I just had a crazy idea to look for commercial property for sale in my home town. Guess what I found..... a picture and a listing for my third place......waiting for a phone call. Really sad that respect & dignity are lost on www.....they become only words

[lattegal]

As a partner I think it should have happened this way:

1. Each closing store/partners notified.

2. Each store manager in each district then told which stores in their district would be closing.

3. Press Release and media notified.

4. List of all store closings issued.

This could & should have all happened on the same day.

I'm pretty sure I'm at a store this is not going to close but we don't know 100% for sure that we won't be. It's really emotionally draining on our partners. I'm sure that many are thinking will I have a job, or won't I, should I start looking for another one, will I lose my benefits...etc????

I love Starbucks and really enjoy my job but this has been handled poorly from a partners view point.

[grendel]

Howard had two confidants to keep his impetuousness in check.

He is surrounded by "Yes" women/men now.

[how sad]

One of our partners, who happens to be deaf, was heartbroken by the news our store was closing. This was the first job she found that she could do in the non-deaf community. And now, because she can't make it to another store like she could ours, she's offered two weeks pay and a wave out the door. That's shameful.

[truth]

The first rule in PR is "get the news OUT". They have blown that, for sure.

But I honestly think they decided to rush the announcement to get ahead of the Schultz lawsuit. Mayor Nickels said last night that the parties were in negotiations over the last few days, and Schultz was a part of the negotiations.

In fact, the settlement wasn't even able to be reached without Howard's approval. Therefore, in parallel, I think they tried to get the store closing story our ahead of the court ruling/settlement announcement.

And they completely f'd it up. I spoke with two media people today who told me they were thinking the same thing. They panicked when they found out the lawsuit was settling (and not in Seattle's favor) and they blew it.

[animal]

Truth:

What lawsuit?

[grendel]

The one re: the Sonics. OKC and Seattle.

I guess Howards suit is still pending?

Howard filed a suit in regards to the Sonics leaving Seattle. Yet, he was a key witness in the Seattle v. OKC.

[HMO]

my store just called an email was sent out to our mall saying there will be a giant protest against all starbucks on Saturday July 5. They are saying it could be one of the largest. It is due to the fact starbucks fired a bunch union members. As if Saturdays at the mall are not stressful enough.

[HMO]

my store just called an email was sent out to our mall saying there will be a giant protest against all starbucks on Saturday July 5. They are saying it could be one of the largest. It is due to the fact starbucks fired a bunch union members. As if Saturdays at the mall are not stressful enough.

[Melody]

I think part of the reason that the media is eating up this story about 600 store closures is because for years we've heard Howard say these kinds of things:

During an analyst conference call, Schultz defended Starbucks' increasingly rapid growth, which one analyst suggested might not be necessary now that the company has a lock on the coffee-shop market.

"The opportunity is larger than we originally thought," Schultz said. "If there ever was a situation where we felt the growth was going to dilute the integrity of the brand or prevent us from creating value, we would slow down or stop it. But that has not happened."

^ That is from about one year ago:
http://seattletimes.nwsource.com/html/businesstechnology/2003550464_starbucks010.html

Now to have Howard Schultz almost seemingly eating his words (he's not eating them, but it's definitely a different tone from everything we've heard him say before) the media is just having a field day with this.

@Grendal: How would you know he has 2 confidants? He needs to be challenged. It's not just him, it's anyone in his position has to have people around him who are not intimidated by him. Someone has to be able to tell an emperor that he has no clothes on. I'm not saying that Howard is in this position: I have no clue, I'm not in the SSC, but rather I'm saying that any good CEO has to be surrounded by people who will be frank with him.

@How Sad: I was in St. Louis earlier this year, and stopped in a Starbucks that had a deaf partner. I was so impressed! I'm sorry about the news.

And sad to say, I think Truth is right, to some degree, about the interplay between the Sonics and the store closures. At least in Seattle, I think there will be some Starbucks back lash.

Pardon typos and spelling errors.

[SoCalRocks!]

Let's get a grip, everyone. This was a lose-lose situation, and the fact that we are all on a gossip site proves exactly why they had to take this approach. As I've said before, if we can't keep our mouths shut on how we "feel" about a new promotional drink before it rolls, then I'm not surprised that leadership decided to take this step.

Don't get me wrong, I think that a list could have been generated and mass emailed, but then we would be on this site hearing from partners who whined that this was no way to treat partners with respect and diginity. I can hear it now "What, no phone calls? No in person communication? Just a black and white email? How insensitive! How disrespectful!! Where is the personal touch that Starbucks used to tout??"

So I'm not saying they did it the "right" way, heck I don't think there even is a right way to approach this. But I understand they were damned if they did, and damned if they didn't, so it was a strict business decision to roll it verbally. Plus, as much as you don't want to hear this, this news can be so harsh to receive that you know they needed HR and senior leadership on site to provide an ear to hear out questions, complaints or feelings of partners, observe reactions, and to ensure no property is destroyed.

And while I'm speaking about this from a partner communication perspective, let me say loud and clear that we have no obligation to the media, and there is a certain amount of backlash or overly harsh criticism we'll receive because they weren't privy to the details. Just look at the reporters who have shown up on this site recently and posted that they are available if we need to "talk it out". Ugh. Reporters remind me of crack dealers these days. I know it's their job, but all they really care about is breaking the story before another channel does for ratings. (Can you blame them? They're probably trying to save their own jobs as well, so I guess not, but ethics these days, I swear...)

[grendel]

Melody,

He doesn't have his confidants now! Howard Behar and Orin Smith used to keep his impetuousness in check.

Check my post for the past tense verb.

We agree. He doesn't have senior leadership to help steer the boat.

I'll forgive the misspelling of my nom.

[y]

Socal, the problem I have is with the fact that they aren't even telling the partners when they're going to be closing, if they are.

[Pat Nerr]

I personally think that they did a great job of communicating the closures. Partners complaining about not being told or not feeling safe in their jobs should just buck up and march "onward". This company has done nothing but good things for you people and all you can do is complain about not being in the loop about who is or isn't going to have a job. How selfish... The SSC has more to worry about than you partners out there busting your butts to make everyone else money to worry about.

if you didn't pick up on the sarcasm that's too bad, cuz I was laying it on pretty thick

[Darleen]

I agree socalrocks! I'm under the assumption that since we are a publicly owned company that for insider stock information they had to be upfront to the public first. I don't think this could've been handled any differently. I'm in the same boat as all of you are, I don't know what will happen in a few weeks, I and you can only hope things work out while getting my affairs in order.

[SoCalRocks!]

Do you think they're not telling just to be mean spirited? Come on now, you should be able to figure out several reasons they would not be able to give a hard and fast date at this point. One, in certain situations, there are exceptional managers and hourly partners caught in stores they were asked to take over to "turn around" that will need to be redeployed. What that means is they'll need to assess the lowest management performers in the area to determine if if makes sense to keep the top talent. Second, some of the lease agreements can't be split overnight. There are negotiations that have to take place, and that means a lot of stores might be TBD. Now, did you want them to wait until those negotiations were finalized before they told those stores? Because I'm sure partners would complain that they weren't given fair notice.

It hurts, and it sucks, I'm not saying I don't empathize. But I think we're getting a little overboard on the analyzation of some ambiguity right now, that have reasonable explanations. The problem is that so many partners have lost faith, that many immediately assume bad intent, which is exactly the opposite of how we used to operate. I think management might be a bit out of touch, and still assume they have a loyal majority workforce, and they're making decisions based on that loyalty. They should probably start assuming the worst, although those types of decisions will hurt partners even more in the long run...that's where I came from and it was not pretty at all...

[In Agreeance with Socal!]

I agree with ever thing Socal Rocks.

First of all, stores that are closing by the end of this month have already been notified. I was told first thing on the 2nd that my store was NOT closing and that no other stores in my area were.

Stores that are closing in the coming months will be notified by their management on the 11th of this month.

There is not reason the media needs a list of exactly what stores are closing. People are only finding out if they are a store that is closing.

And, I would additionally like to point out, Starbucks is STILL opening stores in the US. It's not like we are closing 600 stores and thats it. We are closing th 600 worst performing stores that should of never been opened to begin with, and opening more stores in better locations.

I personally agree 100% with how the announcements are being made.

[Curious]

I am surprised "the list" has not made the Internet and no one is saying which stores are in the first wave. I wish I knew which ones are closing -- any takers

[b]

curious -
That's because a list hasn't been released. The news is that each store that will close will be told 30 days prior to the closing.

[Correction]

Correction. They are not closing the 600 worst performing stores. If this were as simple as closing the bottom 600 then there'd be no ambiguity.

[curious]

That's not true. The RDO's have the list already. Some DM's have received it as well. I'm surprised no one has posted that yet.

[MyGiveADamnsBusted]

Does anyone know if any of the stores in new hampshire, maine, or vermont are closing down?
As well, I feel that the company has been pussyfooting around the fact of which stores are going to be closing. The partners have a right to know if his or her store is gonna close. And is there a guarantee that every one of the partners in these closed stores will find another store location to call home to? What about the partners in the stores that are going to have fewer hours in light of other partners coming into their stores? Partners hours to retain benefits? Is there a guarantee that they will have the required 240 hours per quarter to retain their benefits? The answer to these questions is a big fat NO! I feel for any partners getting screwed. I also feel for the customers that will probobaly go elsewhere and not to another starbucks. Dunkin donuts, tim hortons, independent coffehouses will definitely benefit from this.

[overhere]

Curious, I know that at least two stores in Austin Texas are confirmed for closing

[Curious]

Do you know which ones??

[wondergekko]

In Agreeance with Socal!:
While I'm glad you're apparently in a safe store, not all of us are. And your comment 'We are closing th 600 worst performing stores that should of never been opened to begin with' is not necessarily the case. Quite a few of the affected stores were cannibalized when newer stores(drive-thru) were opened close by. Please don't assume to know the whole story.

[overhere]

Not specifically, sorry. Heard a DM talking about two store meetings that had to be set up immediately.

[Commited Coffee Master]

I'm at work right now... And customers are freaking out! They pretty much think its dooms day for Starbucks.

I wish that this had been kept in the company...

[espressoblend]

And while I'm speaking about this from a partner communication perspective, let me say loud and clear that we have no obligation to the media, and there is a certain amount of backlash or overly harsh criticism we'll receive because they weren't privy to the details.

I agree that SBUX has no obligation whatsoever to make any statement to the media.

BUT, any intelligent company would have a media relations department that has folks in it that are aware of this one very important fact: when there's any big deal in any large company (and especially when it affects 12,000 people) there will be talk. Either the company can control the message, and when it doesn't, the media will.

In this case, SBUX and their "message" is being utterly controlled by the media. The media is in full effect here, putting both incorrect AND correct ideas into the general public's heads. SBUX has done NOTHING to control the what's being said beyond what little they put out a couple of days ago.

So, at this time, regardless of what's being said by the media, people are being fully influenced by what they're hearing on the news, in newspapers, etc. It may be and is probably hyped up incorrect news, but what's being put out there is being established as "general fact" and it will be extremely difficult to change when it comes time to change people's perceptions down the road.

SBUX has failed miserably in controlling the message. This will leave a bad taste in many people's mouths (including current partners that will be retained and those who are fired AND customers). Only this time, it won't be weak espresso leaving the bad taste... it's SBUX utter disrespect for their people and their customers.

[truth]

patnerr- You left out "and Howard works 70 times harder than all of you anyway".

Haven't heard that one in a few days.

[lattegal]

Espressoblend -
I agree with you on this. I don't think communication is our strong point. The same thing happened when we closed all of our stores for "training". Instead of Starbucks letting customers know which many could have been told via email the media picked it up and made all the partners look like idiots and that we didn't know what we were doing and that we all needed to be retrained. Which wasn't the truth. We have very talented people working for Starbucks and that "training" meeting was really to make sure we as a company were all on the same page with things that we all do daily. So yes, our communication needs to get better...much better!

[shaina]

Stores that are closing have been notified, indiviual store meetings are being held. Three stores in my area alone are closing. ITS FUNNY ALL THE PEOPLE WHO POST COMMENTS AND TALK ABOUT THE COMPANY, WHEN TRULY NONE OF YOU HAVE ANY REAL IDEA OF WHAT IS GOING ON. I'm a store manager whos been with the company over 6 years and completely understand why the company is going in this direction. We are 100 % treated with resect and dignity

[SoCalRocks!]

Lattegal- you prove exactly why EspressoBlend's point is incorrect. With the espresso training, we could have decided that we would not release a press release, that we could have just made it an informal partner training session, and communicate it to the partners. Instead we thought we could "control" the message and we proactively announced the whole plan. We played hardball, just as EspressoBlend suggests that we should have done here. The media lambasted us for it. Some say it was the worst PR move in history.

So tell me, why again should we have thought we could have "controlled" the press on this one with extensive detailed messaging? How we've approached this is the exact opposite of the training debacle- we had to address it, but we provided as little actual detail as neccessary to get the point across. Sure the media is speculating, but this is much less of a story, vs. them having actual stores to visit, lists to talk about, cities to do an "in depth" story about, etc.

I find that they're now reduced to the same one liner, over and over again, and while it's tiring to watch, there isn't much of a story at this point. Reporters sure are looking for one, which kinda makes me cringe knowing how much more important things are going on that deserve media time, but I get that they're looking to get paid and there is consumer interest in our brand.

[SoCalRocks!]

And for the displaced partners, I didn't mean to insinuate that this isn't important to us, to you, and to the company (I'm really sorry if it read that way). I just don't think the media finds this "important" rather than "profitable" for ratings.

[stacy]

I'm going to reiterate something from my first post-- If your store ends up on the list, chances are you've known for some time now that your store is not reaching its goals.

Starbucks is not closing all these stores at once, which means they are going to continue to look at each store as a individual. It's a slim chance but it is possible for a store to fall off the ill-fated list. The process is on-going, which is most likely why they have not and will not release a list.

Aside from the piece of shite economy right now, I'm one of the first to proclaim that Starbucks kicked themselves in the ass by opening too many stores, too fast. They've realized it and are attempting to correct it. This company is nowhere near perfect. They make a lot of decisions I don't agree with but imho, they are handling this pretty well. I still maintain people are blowing things way out of proportion. At the end of the day, we all like Starbucks more than we'd like to admit. Otherwise, sites like this wouldn't exist.

[Closing]

i'm a partner that currently works in a store that was told it was closing. yesterday our DM found out around 1230pm with our SM. Our SM then called all of the partners and told them personally that we are unfortunately on the list of closing stores and will be closing by the end of the month. we were then told that we would have a meeting today with the DM where he told us that SBUX will make sure that we are taken care of and that we will be relocated if possible or offered a severence package. when we asked for an offical closing date he couldn't give us one. he couldn't even tell us when we'd know where we'd be relocated or by when. he seemed to know nothing or just wasn't willing or able to tell us anything. i don't like the way SBUX is handling this. they aren't thinking about the partners as much as they say they are. i know for a fact that the other stores in my area aren't looking for more partners and don't have to hours to give to us. they say they'll make it work for us but i don't see how they can. i'm lucky enough to be a seasonal worker in this store and will be returning shortly to my original store that is staying open. but for many i work with they have no options. they don't know what they're going to do once the doors are locked for the final time. i am shocked with how this company is treating us and how little they are telling us. they think that their word is good enough for us, but after this i don't trust them at all.

[Coffee Soldier]

On another note has anyone noticed an increase of business? Our store comp'd a solid 20% yesterday and was blowing up today..now it could be holiday travel but I also had people state they were coming in to be sure we weren't one of the closing stores and they bought more stuff then normal....maybe a good PR stunt for the surviving stores??

[Acctg]

...a company that consistantly makes bad business decisions is a bad investment...

Economics 101

[VT901]

Does anyone know of any SBUX that are closing in the Santa Clarita Valley, CA area?

[Very upset at my company]

For a company that is suppose to be so partner oriented I am furious at how Starbucks is handling the notification of the closing stores. I've had three friends/partners informed today that their store would be closing. They all had the same thing to say. Their DM and RD arrived at their store unannounced and asked to sit down with them. Each manager was informed that they had no details at this time but that their store would be closing in six weeks to nine months. It was all business and no personal connection at all. One of these SM's had a total contribution to variance exceeding 12 percent for the last year. There is no rhyme or reason for this closure other than the property taxes. Starbucks, if this is your way of weeding out the people you don't want than bravo! However, Starbucks you have created a cult...and like any cult that is scourned there will consequences to pay for your actions. Practice the culture you instilled in us!

[Ryan]

Please remember everyone...in situations like this there is no "right way". Any approach will be ridiculed. Look at this for what it is, not what it could have been.