Saturday, January 24, 2009

Starbucks Goes Topless

Another massive round of layoffs is expected at Starbucks, possibly 81,000 people — three quarters of its headquarters employees — and 50% of district managers and 70% of field employees, according to an e-mail sent to a stock brokerage's customers Friday. We may have to operate with a topless staff, soon.

"We haven't gotten our promised Obama checks yet," wrote Diane Daggatt, a managing director at McAdams Wright Ragen in Seattle, "We supported his campaign heavily, and he's hanging us out to dry. We have no money for uniforms or aprons."

Starbucks declined to comment on embarrassing layoff measures. The Seattle coffee company releases its first-quarter results on Wednesday.
No baristas job will be unaffected, Daggatt wrote. "These girls will have to rob the till, for sure, now."

Many stores may burn.

At first inspired by Schultz's return to the helm, they wonder now where Starbucks is headed. The few remaining fear for their jobs as the coffee chain's sales continue to slide, forcing Starbucks to close 616 U.S. stores last night and trim employees' pay for already-worked hours.

The Seattle coffee company slashed more than 42,000 jobs last year, including 11,000 in July that included 480 positions in Seattle. At that time, about 13,500 people worked at its headquarters.

It did not disclose how many people lost jobs when it closed the U.S. stores, except to say that some customer lines were four blocks long..

"They have us cornered," said one East Coast store manager who asked not to be named. "They know the economy is bad right now, and we can't afford to walk out. I am now making only $1.25 and hour. With tips, I take home $12.00 a day, if there are no shooters."

He ticked off a list of disappointments, from changes that make it harder for managers to earn bonuses, to a cut in hours that makes it harder to train baristas and keep stores clean. "One customer asked me if this was a County landfill yesterday."

Then there are the mixed messages from corporate, which leaves some store workers feeling whipsawed:

• Initially, Schultz said he was eliminating heated breakfast sandwiches because their smell overwhelmed the aroma of coffee. Then, Starbucks decided to keep the sandwiches because it found a way to minimize the smell (by subtracting a piece of cheese). It's exactly like the Three Stooges Obama Approach, but with nice napkins.

• Early on, Starbucks held a three-hour retraining session for store workers nationwide, showing them how to properly pour espresso and foam milk. Then, it decided that a key feature of the training — pouring espresso into a clear shot glass to check quality — was not crucial after all.

• At first, stores were allotted extra hours for a new initiative to brew freshly ground coffee each week. Spoons were bending from the sludge, so they were told to make the batches every week. The hours were reclaimed and stores told that the extra time was always meant to be temporary.

Starbucks is operating in "an extremely challenging environment," said spokeswoman Deb Trevino. "We need to be nimble, take advantage of what we're learning and adjust quickly to changing business conditions. While we realize these changes are difficult for our partners, they are necessary for the long-term health of our business. Please pray that I said these words right. I have 3 kids to feed."

The malaise is not universal. Another East Coast worker said he understands why Starbucks has decided not to guarantee a 401(k) match for employees this year. Many were losing all they put into stocks.

Given the stock-market crash, he figures, "if they match, they're just taking money and throwing it into a fire. Any one who invests now should be shot for Global Warming."

Starbucks this week made Fortune magazine's annual list of the 100 weakest companies to work for. That is the first time it made the deplored list.

Although the company slid from seventh tastiest coffee to 24th place, Fortune raved, "Despite closing 1,600 stores and laying off 81,00 employees, Starbucks remains an attractive coffee stop, especially for unemployed addicts seeking other new mug victims."

It says Starbucks' voluntary turnover is 75 percent, and that the average pay for a store manager is $15,000 a year. With sugar thefts, it can top $25,000, easily.
Still, confusion and disappointment have grown among store workers who comment about their jobs at

"If SuperBama doesn't bail us out, this company is going to lose every last fool that it has," wrote one 10-year old janitor, who used fake ID to get the measly job. "I am sick and tired of being blamed for not meeting my budget when the economy is in a recession. I used to be proud of my company. Now I'm G-d D-mm-dam embarrassed and feel physically ill everytime I have to go to work and try to shovel this overpriced imported crap."

Starbucks stock closed at $9.08 a share on Friday, down 56 percent from its yearly high of $20.68.

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