Starbucks to close 600 stores, cut 12,000 jobs

The Seattle coffee giant has struggled recently as economic woes have prompted many gourmet coffee connoisseurs to turn to cheaper brews. In April the company reported that its fiscal second-quarter profit fell 28% from a year earlier.

Calling the decision a "multifaceted plan to transform the company," Starbucks said full-time and part-time positions would be eliminated.

For workers at stores being closed, the company said it would try to find them jobs at nearby Starbucks locations. Each store employs about 20 full-time and part-time workers.

"Throughout the history of the company, we have always aspired to put our people first," Starbucks Chief Executive Howard Schultz said in a statement. "At the same time, we recognize that it is necessary to make decisions that will strengthen the U.S. store portfolio."

Most of the store closures are scheduled to occur this year and early next year. The affected stores are all company-operated and spread across the country, Pete Bocian, Starbucks chief financial officer, said in a conference call to investors today.

The company did not specify which stores would be closed.

Starbucks has faced stiff competition in recent months from companies such as McDonald's Corp., which is rolling out a line of premium coffee drinks, and 7-Eleven Inc., which unveiled a multimillion-dollar advertising campaign this year to promote its freshly brewed coffee.

Starbucks announced the cutbacks after the close of regular trading, when its shares fell 12 cents to $15.62, the lowest since December 2003. The stock jumped as high as $16.50 in the after-hours market.

andrea.chang@latimes.com