Starbucks to cut up to 12,000 jobs, close 600 stores
LOS ANGELES (Reuters) - Starbucks Corp (SBUX.O) said on Tuesday it plans to close another 500 underperforming stores and eliminate as many as 12,000 full- and part-time positions, lifting shares nearly 6 percent.
The company, which now plans to close a total of 600 underperforming stores versus its previous estimate of 100, said the majority of the stores will be closed by the end of March 2009.
Starbucks estimated that total pretax charges associated with the planned U.S. company-operated store closures, including costs associated with severance, would be in the range of $328 million to $348 million.
The nation's largest coffee chain said 70 percent of the stores targeted for closure have been open since the beginning of fiscal 2006. The job losses would represent about 7 percent of the company's global work force.
The company aggressively opened stores in areas such as California and Florida, which have been hardest hit by the U.S. housing downturn. Some investors have pushed the company to increase the number of store closures.
Starbucks also said it will open fewer than 200 new U.S. company-operated stores in fiscal 2009, down from 250 previously.
The stock rose to $16.53 in late electronic trading, up 5.8 percent from its close of $15.62 on Nasdaq.
(Reporting by Lisa Baertlein; editing by Jeffrey Benkoe)
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