NEW YORK - Starbucks Corp., which already plans to shut 600 stores, said yesterday it is also cutting almost 1,000 office jobs as part of its bid to re-energize the brand and boost its profit.
Of the new cuts, 550 of the positions are layoffs and the rest are unfilled jobs.
The disclosure came a day before Starbucks was set to report its third-quarter financial results, which analysts expect to show a substantial decline in profit because of slower traffic and a drop in sales at established stores.
For the company's investors, the store closures and layoffs offer some hope that the chain's declining traffic, profit, and stock price may all rise again.
But optimism is absent among many of the company's employees, who say Starbucks is hurting its workers and customers to save its stock price. The shares have sunk 47 percent in the past year.
"Closing stores is definitely not for the employee or customer's benefit," said Dave Ebert, a 21-year-old barista in Minneapolis whose store is closing. "It seems like a lot of their business decisions lately have been shareholder-focused."
The latest round of job cuts are in addition to the layoffs from the store closures, although not all employees at stores that are closing will lose their jobs. In a letter to employees, chief executive Howard Schultz said about 70 percent of employees in stores set to be closed this month have been transferred to other locations.
Schultz also revealed several management changes. Martin Coles, chief operating officer, will become the president of the firm's global business. The company said the chief operating officer's position will be eliminated.