Starbucks Corp. plans to lay off nearly 7,000 people, close 300 more stores

NEW YORK — Starbucks Corp. plans to slash nearly 7,000 more jobs during a new round of store closures and other cuts, the company said as it reported Wednesday that its profit dropped by more than two-thirds in its fiscal first quarter.

The gourmet coffee chain plans to close 300 underperforming stores around the world — including 200 in the U.S. — by the end of the fiscal year in addition to the 600 U.S. stores it began closing this summer.

The new store closures could result in the loss of 6,000 jobs, but the company said it will try to offer employees transfers to other nearby locations.

Starbucks also plans to lay off about 700 nonstore employees and has reduced the number of new stores it plans to open.

The cuts and changes will result in about $500 million in savings in fiscal 2009, the company said.

With the recession now well into its second year, consumers concerned more about the possibility of losing their jobs than maintaining a $4 daily latte habit are increasingly forgoing the company's brew.

Starbucks also has had to make room for a new lower-priced competitor in the specialty-coffee industry since McDonald's Corp. introduced espresso-based coffee drinks in its U.S. stores.

Wall Street had largely expected Starbucks to report dismal performance for the quarter, which ended Dec. 28.

The company indeed fell short, with net income of $64.3 million, or 9 cents per share, down 69 percent from $208.1 million, or 28 cents per share a year earlier.

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