Starbucks Lays Off 870 Assistant Store Managers

Starbucks announced today that they will be laying off 870 assistant store managers and not filling 530 vacant positions. In addition, 500 non-store positions will also be eliminated. Read the memo inside.

Starbucks says:

Dear Partners,

As we communicated on January 28, Starbucks is reshaping our operating model and organization structure to support the long-term health of our business. This includes both organizational changes and the difficult decision to reduce our global workforce. These changes are necessary as we navigate through this challenging economy, and they are critical to ensuring we have a sustainable and successful business going forward.

Based upon the company’s current and anticipated future needs, certain non-store and store positions have been eliminated or restructured globally. In some cases, certain roles or functions are being eliminated, and those partners will be separated. In other cases, there will be a reduction in the number of similar positions. The first part of this process took place last week with notifications in Partner Resources and Partner & Asset Protection.

Today, approximately 500 U.S. and Canada non-store partners are being notified that their positions have been eliminated. Of these, approximately 300 are at the Starbucks Support Center (SSC) in Seattle. Similar notification and consultation processes are currently taking place in company-owned international markets in accordance with local employment laws.

As part of a broader labor efficiency initiative, approximately 870 Assistant Store Managers (ASMs) are being notified today that their positions are being eliminated. An additional 530 unfilled open ASM positions will not be filled. This change reflects our current business environment, along with recent and new store closures and the reduction in new store openings. The ASM role continues to be critical; however, we no longer require as many positions.

A number of organizational changes are being announced globally to ensure that we have the right structure and leadership to support our strategy. These changes include:

• Canada and Latin America will be combined into a single region (Americas) in order to leverage regional talent and leadership and to make SCI more scalable.

• Our U.S. Field Operations structure will be realigned, with DSVPs focused on setting national strategy and implementing enterprisewide programs. RVPs and their RDs and field teams will focus on ownership of their respective regions and on localizing implementation of company strategies.

We are thankful and proud of the contributions our partners make to the organization, and we are committed to treating all partners with respect and dignity – those who are departing Starbucks and those who will stay.

Over the next week or so, partners who will continue on the journey with us will have a series of meetings with their leaders and workgroups. We will use these meetings to map out a direction for the future.

In the meantime, partners have many resources available to provide support. In addition to your leadership team and Partner Resources staff, the Employee Assistance Program (EAP) is available for all partners. In the U.S. and Canada, EAP counselors are available 24 hours a day, 7 days a week, at (800) 682-0364. International partners may refer to the EAP numbers in their respective regions or markets for assistance.

We realize how difficult it is to say goodbye to partners who have played such a critical role in the success of Starbucks over the years. We thank you for your passion for Starbucks – and your fellow partners.

Regards,

Chet Kuchinad

evp, Partner Resources

Over at Starbucks Gossip the former ASMs are sharing their stories. Rumors are flying that all assistant mangers nationwide are being let go, but the Seattle Times says that the number is a less than than half of all positions.

Starbucks pink slips going out today to HQ workers, assistant store managers [Seattle Times]
What are you hearing about Wednesday’s layoffs? [Starbucks Gossip]
(Photo:artnchicken)

Comments

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  1. pecan 3.14159265 says:

    That’s terrible for these people. Things suck for a lot of us who work really hard, and are only seeing pink slips.

  2. Corporate_guy says:

    How nice, shift all the hours and work to salaried managers.

    • GothGirl says:

      @Corporate_guy: This is EXACTLY what will happen, I work for a large retail chain and all of our labor hours were cut in half. So now as a Manager I get to work 60 hour weeks.

  3. thezone says:

    This is really terrible. The layoffs don’t seem to be stopping. Let’s hope the stimulus works and private sector jobs start coming back sooner rather than later.

    • Collie says:

      @thezone: It will not work, what part of that so called stimulus is going to help a laid off coffeejockey find a job? I guess they can use a shovel next year when the project finally gets plans drawn, through inspection, surveying, and so forth.

    • Oranges w/ Cheese says:

      @thezone: I doubt the stimulus will make consumers comfy enough to keep buying massive amounts of overpriced coffee.

      • consumerfan says:

        @Oranges w/ Cheese: Nothing except a global coffee shortage is going to STOP me buying massive amounts of overpriced coffee.

        Sadly for Star*ucks staff, I don’t like their coffee. Tastes burnt.

  4. ZukeZuke says:

    Ugh.

  5. pecan 3.14159265 says:

    I wonder if there’s any data out there to track older workers who are nearing retirement age, who had planned on retiring but are now back in the workforce. I’ve noticed a great deal of “older” workers who are my parents’ age (50s) and above who are popping up in Starbucks as workers, and I’m just wondering whether that’s something a lot of older workers are doing. And whether it’s something they want to do (work at Starbucks) or something they feel they’re forced to do to make ends meet.

    I hate to presume, but a worker at one of my local Starbucks is in this age bracket and I just thought it was odd that there would be an older man in his 50s working with all the high school and college kids. And then I saw another person in her 40s or early 50s working there, and I wondered if that was getting more commonplace.

    I haven’t seen the guy in a few weeks, so I wonder whether he was let go. If that’s the case, that sucks, because he was a nice guy. He just didn’t seem to remember complex orders well. Anything other than a drip coffee seemed to take forever to price on their registers and if you ordered more than just a drip coffee, sometimes he would forget.

    • ElizabethD says:

      @pecan pi:

      They may be laid-off older workers who hadn’t planned on retiring from their “career jobs” and have had to grasp at minimum-wage jobs just to get by.

      There is just NOTHING out there. At least not in our state. Scary times.

    • Eyebrows McGee (now with double the baby!) says:

      @pecan pi: I’ve had friends in their 30s and 40s who worked part time at Starbucks once their young children were in full-day school. The pay is good, there’s health insurance available if their primary-breadwinner spouse freelances or is self-employed, and the hours were flexible enough for them to be at home when the kids were home. And lots of teenagers to work during non-school hours. :)

      • Cafezinha says:

        @Eyebrows McGee: Unfortunately, due to the current clusterfuckery in the economy, all the things that Starbucks has been well-known for (flexible scheduling, insurance benefits, personal days, and so on) are slowly going away, sometimes in very sneaky ways.

        We’re not laying off any baristas…but when they close the stores, the transfer process is difficult and sometimes, there’s just nowhere left to transfer to.

        The flexible scheduling has changed so that basically, if you can’t commit to an availability as close to open as possible (such as in the case of students or those working second jobs), you are being let go come March, if you haven’t already.

        I worked there for quite some time and had a great time doing it, but lately it makes me really sad to see the changes the copmany has made lately.

        • barb95 says:

          @Cafezinha: My dad was set to retire in a year from his union job but is now staying on for another 5 years. Two of his co-workers actually retired, but came back 5 months later when the economy tanked. Sad.

  6. thinkliberty says:

    Starbucks is a ripoff.

    I can get a monster or rockstar coffee drink at half the price of a starbucks latte.

  7. Trai_Dep says:

    So, those positions are “burnt”?

  8. Trai_Dep says:

    To Starbucks’ credit, they’re NOT announcing their stopping offering health insurance, to even their part-time workers. So, kudos that.
    Chalk another one up to over-deregulating our (former) financial industry.

    • thewriteguy says:

      @Trai_Dep: While I agree with you on the matter with our financial industry, I think this issue is more of a case of Starbucks losing customers who are cutting back, and worsened by the fact that Starbucks simply over-expanded throughout the late 1990s and 2000s.

    • craptastico says:

      @Trai_Dep: i don’t see how you’re attributing this to the financial industry. we’re in recession because of years of unchecked spending, paid for by an overzealous real estate market. if the market weren’t allowed to balloon, these people never would have had jobs to begin with. i think the real problem is that my town never really needed 2 starbucks in addition to the 2 dunkin donuts and 3 independant coffee houses, not to mention that any gas station usually sells coffee as well.

      • Trai_Dep says:

        @craptastico: Bubbles are bad, precisely because they lead to growth that can’t be supported without it. No bubble, more organic – and sustainable – growth, thus no collapse.
        Reasonable Wall Street regulation = no real estate bubble = no subprime meltdown = no crash.

        No bubble, perhaps slower growth when compared to the high point of the bubble, but it’s arguable that there’d be more jobs now had we not gone down this path. Very arguable.

      • Jrsy Devil's Advocate says:

        @craptastico: Exactly! Although there are no Starbucks immediately local to me there are at least 8 Dunkin Donuts between my town and the two surrounding it.

        Not that I’m complaining…

        • Trai_Dep says:

          @Jrsy Devil’s Advocate: Where does one live where there’s an 8:1 Dunkin’ Donuts:Starbucks ratio? A truck stop?

          • Jrsy Devil's Advocate says:

            @Trai_Dep: No, it’s more like 8 to none. I remember reading an article in the local paper three or four years back about a Mom & Pop coffee shop that was fuming over the number of D&D’s and how it was affecting their business.

            They closed up shop about a year or so ago…

            • Trai_Dep says:

              @Jrsy Devil’s Advocate: The shame is, had they upgraded their coffee (or at least poured more grounds into their pot), and maybe came up with a competing fast-good-natural-ish breakfast, they probably would have done okay. There are a lot of indie cafes here that do fine w/ a Starbucks (or two) across the street. The thing is, you can’t just sit there or the chains will steamroll you. Room for both, though.
              Now, I’ll just retreat to my corner, quivering in alarmed shock that there’s somewhere that doesn’t have a Starbucks in walking distance…

  9. philmin says:

    Geesh, how neccesary is it to have middle management in a coffee shop anyways? Good cost-cutting decision.

    • Etoiles says:

      @philmin: Ever worked retail? The most common hierarchy is:

      -Store Manager
      –Assistant Manager
      —Shift Supervisors (1-6)
      —-Peons (clerks, baristas, etc)

      You need enough management level folks that there is someone with sufficient authority to make store decisions around at almost every hour during which the store is opened. The level of decisions that the lowest and next level of employees are allowed to make, even when they know the “right” answer, is generally extremely limited. So a location that has any real business at all will need at least one assistant manager.

      That said, most locations of smaller stores (something like a Target is different) don’t need much more than one assistant manager, either. At least, not as badly as they need to stay open.

      • philmin says:

        @Etoiles:

        I actually worked at Target for a few years when I was a kid, and definitely saw the need for the hierarchy there. Im not sure I see it as much in a coffee shop. Here is a question I have… what kind of business would you say an average Starbucks does in a day? Im just not sure the revenue stream justifies a 4 level hierarchy.

        • bbagdan says:

          @philmin:

          i worked in an independent cafe back in the good old days. we had about 20 staff (most of us were University students). Daily ringouts were in the $1500-2000 range. We had an owner, manager, assistant manager, and a few key holders. all the positions were necessary.

      • craptastico says:

        @Etoiles: the difference is a starbucks should never really need more than 2 or 3 employees working at once. if that also then requires a shift supervosor, asst manager and store manager, than somebody in the food chain is getting paid for little work.

        • MonkeyButt says:

          @craptastico: The Starbucks I worked at rarely had the assistant manager and manager working at the same time. And sometimes the assistant manager wasn’t working either and the shift supervisor was the top level employee. So with 3 people working it could be barista, barista, assistant manager or barista, barista, shift, or barista, shift, mgr, etc. etc.

          • Etoiles says:

            @MonkeyButt: Right. Exactly.

            Also, @ craptastico — Most Starbucks I’ve been to definitely need 5-10 employees at a time. But the Starbucks I’ve been to are in Boston, New York, or DC, and very well-visited.

  10. ElizabethD says:

    So much for all those fallback careers for the overeducated unemployed…..

  11. aedude01 says:

    Is anyone counting the number of layoffs this week? It feels like we need some sort of layoff number tracking blog….

  12. chiieddy says:

    My husband is an ASM at Starbucks. It’s a position used by the company to train future managers. From what I understand, the cuts were made for ‘career ASM’ (people who have expressed no interest in going further with the company) as well as certain underperforming ASMs. The total sales requirements for stores to qualify for an ASM was raised earlier this year, so there was a hint this was coming. My husband was moved out of one of the stores that no longer qualified to a new store in early January.

    The ASMs affected were asked to report at 8:30 am this morning. They pretty much knew yesterday (unless they were particularly dense), so we knew my husband’s job was safe then.

    • philmin says:

      @chiieddy:

      Now knowing that its pretty clear that it’s no longer a position used to train future managers, will your husband start looking for new work?

      • chiieddy says:

        @philmin: There’s no indication whatsoever that it is no longer an position used to train future managers. It’s still EXACTLY what it is. You’ll notice the people who were kept were in well performing stores and some had been moved in place months ago.

        If you can’t read the tea leaves about these things, you shouldn’t be in management. We knew this was coming over a month ago.

        • philmin says:

          @chiieddy:

          Being realistic, what kind of expectations can one have for new people taking on manager roles at a place like Starbucks in this economy? They haven’t even finished closing stores this year.

          What kind of money can a store manager make? Can it be as much as 50k a year?

          • chiieddy says:

            @philmin: Well, they’re opening new stores in new markets this year. Underperforming managers will be leaving. There’s still opportunity.

            And yes.

      • JustinAche says:

        @philmin: I actually read her statement as “He wants to move up, and/or he’s competent at his job, and is allowed to stay”, so they are keeping him on

    • quail says:

      @chiieddy: Thanks for the intel. Makes sense to cut some ASM positions if all it is used for is a stepping stone to higher positions. Yea, it hurts some employees. But it makes sense.

      • chiieddy says:

        @quail: I figure SBUX, like many other companies, including my own are battening down the hatches for 2009. SBUX did have a 1st quarter profit, it’s just down from last year.

  13. u1itn0w2day says:

    The news is bad but let’s face it Starbucks already announced about 900 closings since last summer and this latest round should be no surprise to middle management anyway .In ANY company middle management is frequently the first to go or the hardest hit percentage wise .

    The salaried managers will get more work in spots but now we get to see who really knows coffee and their customers and who is nothing but a professional administrator and delegator .

    Management in particular should realize they are in a very price sensitve business right now .I admire Starbucks and the employees for working there and capitalizing on fad or trend .But it’s over .

  14. MrsLopsided says:

    “Canada and Latin America will be combined into a single region (Americas) in order to leverage regional talent and leadership and to make SCI more scalable.”

    How do you leverage regional talent by merging regions with different languages in 2 different hemispheres?

  15. 1stMarDiv says:

    Hopefully the assistant to the assistant manager positions will be ok.

    *Movie reference

  16. thewriteguy says:

    In order to stop the flow of red ink, Starbucks needs to swallow the pride: While they can indeed blame the economy for losing customers who are cutting back, their situation is worsened by the fact that they simply over-expanded throughout the late 1990s and 2000s.

    They need to close more than 1,000 locations. I would guestimate that they need to close over 2,000. And they need to stop coming up with gimmick drinks (like that Vivanno or Chai Berry Tea) to match the success of their frappuccino. These new drinks just aren’t moving (because they taste awful).

  17. jmndos says:

    If they wanna stay afloat…..they should ditch ATT and Tmovile for WIFI and have it FREE, like their competators.

    I do not want to buy a rewards card, keep track of it or whatever. I want hassle free coffee and maybe some wifi to check my email. I don’t wanna pay 3.99+ for it.

    I can go their local competators which offer cheaper coffee, free wifi, and no crazy towing scam.

  18. JGKojak says:

    Its a shame… because being an ASSISTANT Store Manager for Starbucks really makes you overqualified for all the other jobs you could do… like Carinval Booth Worker.

  19. hairyseaword says:

    In other news: Overpriced, indie record stores on Wednesday reported a 10-fold increase in applications from brooding hipsters.

  20. kwsventures says:

    Do we really need a Starbucks on nearly every street corner?

  21. savdavid says:

    “We realize how difficult it is to say good bye…” “thanks for your passion. bye!”