SEATTLE - Starbucks Corp. said Thursday it has laid off about 220 support staff who worked at the coffee retailer's headquarters and in field operations, and will leave about 380 open jobs unfilled.Chairman and Chief Executive Howard Schultz announced the 600 job cuts in an e-mail to Starbucks' more than 170,000 employees, calling it a difficult decision aimed at sharpening the company's focus on customers.
"We realize that we are operating in an intensely challenging environment, one in which our customers and (employees) have extremely high expectations of Starbucks," Schultz wrote. "And we have to step up to the challenge of being strategic as well as nimble as our business evolves. Unfortunately, we have not been organized in a manner that allowed us to have a laser focus on the customer."
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Cutting jobs is definitely an indicator of decreased demand and therfore decreased sales in a market. Competitors in the coffee industry are doing consumers a service by challenging the $5 cup of coffee that Starbucks sells on a regular basis which is hardly a variant of the competitors. Now Starbucks must take necessary action in order to regain another edge, besides the ubiquitous Starbucks logo. Howard Schultz, the CEO, iniated the cutting of jobs: reducing the costs of production. If demand goes back to normal or better, then the managerial step was a success even at the expense of people's jobs. Hopefully because of the increased competition, consumers will see Starbucks lower their prices but probably increase adverstising, a nonprice form of competition, will occur.
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